Market Overview

There Was An Unusual Options Trade Prior To Akorn Takeout Chatter

There Was An Unusual Options Trade Prior To Akorn Takeout Chatter

Akorn, Inc. (NASDAQ: AKRX) shares are up 18.2 percent on Friday after Bloomberg reported Frensius is considering a buyout bid for Akorn.

The news came just hours after Benzinga alerted its pro subscribers to an unusually large Akorn call purchase on the options market.

At 10:29 a.m. ET on Friday, Benzinga Pro sent out the following options alert:

  • AKRX Option Alert: Apr 21 $27.5 Calls at the bid: 1350 @ 0.85 vs 253 OI; Ref=$26.645

Akorn shares spiked from around $27 to $30 roughly 3.5 hours later when the Frensius story broke.

What's Up With Options?

Stock traders often watch the options market for any unusual activity, such as the big trade in Akorn ahead of the buyout news.

Options traders are typically seen as more sophisticated and advanced than the average stock trader. That generalization is particularly considered to be true when it comes to options traders who place extremely large orders. In other words, when somebody makes a huge bet in the options market that a stock is going to go up or down, stock traders take it seriously.

The Benzinga team is constantly scouring the options market looking for trades that could indicate big stock market moves ahead. Akorn traders that used Friday morning’s option trade as a buying opportunity certainly didn’t have to wait long for a big payoff.

Related Links:

How To Read And Trade An Options Alert

Does Reward Potential Still Outweigh The Risk In Akorn Shares?

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