Unusual Covered Call Opportunity Raptor Pharmaceuticals

According to Options and Volatility, shares of Raptor Pharmaceuticals RPTP saw unusually high options activity on Wednesday. Notably, the August 14 calls traded 3,962 contracts versus only 137 open interest. The January 12.50 calls also had above average volume. In addition to the increased volume, the implied volatility on the August 14 calls rose dramatically, moving from 60.27 on Tuesday's close to 71.79 on the close Wednesday, an increase of over 19 percent. This set up a covered call opportunity, buying shares of RPTP and selling the August 14 call for each 100 shares purchased. Options and Volatility noted this trade captures the implied volatility edge and positions bullishly along with the large call buyer. While the stock moved up 0.68 today, the August 14 calls nearly matched that gain, rising 0.62 due to the large call buying. The August 14 calls have a delta of 61, while the covered call position has a less bullish delta of 39. Shares of RPTP closed higher by 4.90 percent at 14.55. Disclosure: Author holds a long position in RPTP.