GENE --> By 12:22 p.m. CDT (1722 GMT), roughly 2,590 calls and 600 puts had changed hands on the American Stock Exchange, Chicago Board Options Exchange and
Philadelphia stock Exchange combined.
That was the highest single-day options volume since last June, when daily options turnover exceeded 2,000 contracts on several occasions, according to Track
Data figures. It also far eclipsed average daily trading volume during the last 20 sessions of about 135 contracts.
The in- and at-the-money call buying helped boost implied volatility to about 110 percent from around 95 percent across all months, said Robert Wasserman,
designated primary market maker with Botta Capital Management at the Chicago Board Options Exchange.
The stock's one-month historical volatility was 81 percent, Track Data's programs showed.
Implied volatility gauges as a percentage how much the options market thinks the stock price will move during the option's life. Historical volatility measures how
much the stock actually has moved during a specified time period.
The July 15 calls, which were up $1.75 at $2, had combined interexchange volume of about 520 contracts on open interest of 59 contracts.
American-style equity call options give buyers the right to purchase the underlying stock at a set strike price during the option's life.
Options strikes at 15, 17.5 and 20 were added where needed on Wednesday as the stock climbed.
But Wednesday's options trade also featured more call selling than seen recently, activity that Wasserman figured likely represented profit taking from the recent
run-up.
Stock of Waltham, Massachusetts-based Genome Therapeutics jumped by more than 50 percent Wednesday morning to an intraday peak of $14.56 a share after
Ladenburg Thalmann analyst Albert Rauch rated the shares a ``strong buy'' and predicted they will hit $84 within 12 months.
Genome Therapeutics develops therapeutics, vaccines, and diagnostics with big drug companies and also provides them with gene sequencing and other services.
The stock, which has drifted upward since probing below $5 a share in early April, began climbing on May 21 when it gained $1.55 to close at $9.25.
By early Wednesday afternoon, the stock was up $3.55 or 37 percent at $13.05 a share on Nasdaq market volume of 8.2 million shares. |
