InterMune Sees Pre-Event Options Activity (ITMN)
InterMune, Inc. (NASDAQ: ITMN) is up today despite the soft markets. This would actually make this the third day of gains in a row. The options trading continues to be very bullish, as shares gain 3% and implied volatility pops another 4% today. There is options trading building up here as well.
The Company recently raised cash through a 5 million share issuance. It’s key drug pirfenidone was granted fast track status at the FDA in early January, 6 month review period. It treats IPF, a fatal lung disease. Data is expected in the first from Phase2b studies of RG7227 plus SOC, for HCV.
Today there was a buyer of 2,500 March $17.50 calls at the offer on wide spreads, and now a 1,250 contract March $17.50/$15 bullish risk reversal trades for a 5 cent credit.
On Wednesday implied volatility spiked 16% higher and calls traded 3-times average with 3,000+, buyers in out-of-the-money March $17.50 and $20.00 calls. On the day 6,200 calls traded, 6X average. On a 50/95 bid-ask spread a trader bought more than 800 March $20 calls at 80 cents, 50% out of the money, extremely bullish. InterMune has a 12.6% short float, 9.8 days to cover. March implied volatility is 102% compared to Feb of 55%, while April is 155%, so traders are positioning for a catalyst.
Today call volume is approaching 6,000 once again.
Joe Kunkle, OptionsHawk.com
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