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Kevin Cook discusses unusual options activity in Myriad Genetics Inc. (MYGN) and Human Genome Sciences Inc. (HGSI).
Kevin Cook is an options instructor for the Options News Network. He was an institutional foreign exchange market maker and arbitrageur for nine years, where he worked with futures.
Myriad Genetics (MYGN) News: Canaccord upgraded MYGN to a “buy” from “hold,” and JP Morgan Chase maintains its bullish stance on the stock. The January 2010 30 call buy-write strategy – buying the stock and selling an upside call – is currently priced at $3.25 and yielding 11.1%. The stock is currently gapping up 13.25% to $29.31.
MYGN: $29.31 up $3.4300 or 13.25% volume: 2.60 million shares
Straddle: Sep09 30.00 trading $3.1000 price over strike: 10.3333%
Prev. Day Straddle: Sep09 25.00 trading $3.7000 price over strike: 14.8000%
BuyWrite: Jan10 30.00 Calls Yielding 11.09% call: $3.25
Prev. Day BuyWrite: Jan10 30.00 Calls Yielding 6.06% call: $1.77
Human Genome Sciences (HGSI) News: Amid continued takeover rumors, Human Genome Sciences is up 15.6% today to $22.20. This is still well below the rumored $30 takeover bid from GlaxoSmithKline. The September 25 calls have seen about 4,500 contracts cross the tape this morning versus open interest of 7,073.
HGSI: $22.20 up $2.9940 or 15.59% volume: 8.74 million shares
Straddle: Sep09 22.50 trading $6.1750 price over strike: 27.4444%
Prev. Day Straddle: Sep09 19.00 trading $4.2250 price over strike: 22.2368%
BuyWrite: Jan10 22.50 Calls Yielding 25.00% call: $5.55
Prev. Day BuyWrite: Jan10 20.00 Calls Yielding 22.52% call: $5.00
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