By David Russell
optionMONSTER's Heat Seeker tracking system detected the purchase of 5,000 July 10 calls for $0.50 and the sale of a matching number of July 5 puts for $0.20. The trade cost a net debit of $0.30, and volume was more than twice open interest in both strikes.
Allos ALTH rose 1.14 percent to $7.52 in afternoon trading and is up 14 percent in the last three months. The drug developer received approval for Foltyn in September and reported a wider loss on March 2 as management increased marketing expenditures.
Several analysts have issued bullish comments on the drug, which treats T-cell lymphoma, citing strong demand and saying it could sell better than most investors expect.
Today's bullish combination strategy is designed to leverage a rally in the shares. The investor will double his or her money for every $0.30 that ALTH closes above $10.30 on expiration.
They will lose their debit if it fails to push above that level and be on the book for bigger losses if the stock falls below $5.
The trade accounted for almost all the activity in ALTH Thursday, and pushed total options volume to 10 times greater than average.
(Chart courtesy of tradeMONSTER)