A large call spread initiated on Orexigen Therapeutics, Inc. (Ticker: OREX) on Monday morning looks for shares in the name to rally approximately 30% by September expiration. The September expiration is noteworthy as the company awaits the results of the FDA’s review of its resubmitted New Drug Application (NDA) for NB32, an investigational medication being evaluated for weight loss, after the review was extended for three months back in June. The upcoming Prescription Drug User Fee Act (PDUFA) date is September 11, 2014, according to a press release issued by the company. Shares in Orexigen today are up roughly 0.40% at $5.34 as of 2:15 p.m. ET.
The largest trade in OREX options today appears to be the purchase of a 10,000-lot Sep 5.0/7.0 call spread at a net premium of $0.72 per contract. The spread positions the investor to make money above an effective breakeven price of $5.72, with maximum potential profits of $1.28 per contract available on the spread in the event that OREX shares rally 31.0% over the current price to hit $7.00 at expiration. Shares in Orexigen last traded above $7.00 on June 10th.
This article will become free after 48 hours (see below for free content). To read the rest of this article now, along with Phil's live intra-day comments, live trading ideas, Phil's market calls, additional member comments, and other members-only features - Subscribe to Phil's Stock World by clicking here.
Tags: OREX
This entry was posted on Tuesday, July 22nd, 2014 at 4:55 pm and is filed under Uncategorized. You can leave a response, or trackback from your own site.
Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!
