Arena Pharmaceuticals (ARNA, news, chart) is seeing ten times its normal options trading volume and implied vols have spiked higher. Shares are up 54 cents to $5.67 the day after a TCW portfolio manager highlighted the stock on CNBC. The manager believes the stock will shine during the next six to twelve months. Some players in the options market seem to agree, as the July and August 7.5 calls are seeing buying interest on Friday. Directional sentiment based on today’s total volume is 73 percent bullish and implied volatility in the at the money options is up 42 percent on the day, indicating increased probabilities of volatility in ARNA in the near term.
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.