Avanir Pharmaceuticals got hammered late last year, but traders are betting on a comeback.
optionMONSTER’s Heat Seeker monitoring program detected the purchase of roughly 8,000 April 4 calls, most of which priced for $0.73. A similar number of March 4 calls were sold around the same time for $0.42 in volume below the previous open interest in that strike.
It appears that an investor previously owned the March contracts and is rolling the position forward in time. Making the adjustment cost $0.31 and gives an extra month for the stock to rally. The trade also provides protection from the quickening pace of time decay that will occur in coming weeks.
— Option Monster