BSX – Boston Scientific Corp. – Call options on the medical devices maker are active this morning on news one of the company’s stents has received regulatory approval for additional uses in Europe. Boston Scientific’s PROMUSElement Everolimus-Eluting Coronary Stent System was given CE Mark approval for use in patients suffering from diabetes and for use in those patients experiencing a heart attack. BSX shares reacted by rallying 4.7% to an intraday high of $5.80 as of 12:00 pm in New York trading. Options investors scooped up call options in the October and November contracts, exchanging more than 4.5 calls on the stock for each single put option in play thus far in the session. Traders purchasing the calls could be initiating fresh bullish stances or buying-to-close previously established short call positions. Call volume is heaviest at the October $6.0 strike where some 8,300 calls changed hands versus existing open interest of 6,482 lots. It looks like roughly 4,800 of those calls were purchased at an average premium of $0.13 apiece. If investors are buying the calls outright to position for shares to continue higher ahead of October expiration then profits start to accumulate should BSX shares rally another 5.7% to trade above the average breakeven price of $6.13. Another 3,300 calls were picked up at the November $6.0 strike for an average premium of $0.33 each. The sharp increase in demand for BSX calls lifted the stock’s overall reading of options implied volatility as much as 25.5% this morning to an intraday high of 50.07%. Implied volatility has come off significantly and currently stands 9.5% higher on the day at 43.67% as of 12:20 pm ET.
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Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
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