Weekend Review: Big Options Roll Activity in Arena (ARNA)

Posted in General, Options 
September 19th, 2009

Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) was the dark horse winner Friday after gapping down big and closing up over 5% at $5.18.  At first, this looked like a win for VIVUS and Orexigen but the data here ended up being good enough as an alternative.  The CEO also gave a very impressive interview on CNBC when the stock was still down.  This is a Must-Watch for stock and options volume next week because of this activity.  The volume in the stock was more than 127 million shares, something to the tune of about 20-times traditional volume and about 15-times the most active day in the last 3 months.  We did see some active trading rolls take place in the SEPT-2009 $5 and $6 Calls with about 20,000 contracts between the two and almost 19,000 contracts in the $4, $5, and $6 PUTS…. There were over 40,000 contracts traded among the various CALLS for OCT-2009 and what came to almost 60,000 of the various PUTS for OCT-2009.  The open interest is also big here and this big Friday drop and then gain will have shaken many of those trades out.  We will look at this on Tuesday to Wednesday for a better handle on how the open interest looks. -JON OGG

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