Biopharmaceutical company Medivation isn’t participating in the broad market rally today, but one large option trade is bullish.
More than 8,800 MDVN options have traded already this morning, compared to a daily average of 1,300 in the last month. Almost all of the action is in a three-way spread.
A trader sold 2,750 December 52.50 calls for $3.30 against open interest of more than 3,600 contracts. At the same time, he or she bought 2,750 January 55 calls for the ask price of $3.70 and sold the same number of the January 65 calls for $0.40. The volume at each of those strikes was more than open interest, and the bid/ask spread is wide at all three strikes.
— Option Monster