Warner Chilcott (WCRX) adds 51 cents to $18.25 in active trading of 4.8 million shares and implied volatility in the options on the drugmaker is moving to 52-week highs amid brisk trading in the puts and calls on the stock. The top trade is a July 21 – 28 call spread for $1.10, 2000X on PHLX. Earlier in the day, 2000 Jul 21 calls traded on the stock for 85 cents. The market is now $1.30 to $1.45 and volume is approaching 10,000 contracts. Some of the flow also seems to be due to July 15 – 21 bullish risk-reversals, which have traded 2400X for 80 cents on NYSE-ARCA. Overall flow looks bullish and implied volatility is up 19 percent to 83.5. No news on the stock today, but there was M&A chatter circulating in WCRX Friday.
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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.