Stock Option Investment Advice

What’s Up With Gilead Sciences Call Options?

Gilead Sciences (GILD) call option volume went ballistic yesterday, a day after it reported earnings. Its stock price was down slightly as well.

If you’re sick, Gilead Sciences may have just the drug for you. Gilead develops, licenses and markets a number of drugs including: Truvada, Viread, Atripla, Emtriva, Hespera, AmBisome, Flolan, Vistide, Tamiflu, Macugen, Letairis and Cicletanine.


Gilead’s competitors include: Bristol-Myers Squibb (BMY) and GlaxoSmithKline (GSK).

Gilead’s stock price has been in a trading range from the low $40’s to the low $50’s over the last year.

GILD Chart

Gilead’s November 46.00 and 47.50 call option volume was very high yesterday. The 46.00 call option was slightly in-the-money and the 47.50 call option was slightly out-of-the-money. There was some action on Gilead’s November 44.00 put option volume yesterday, but nowhere near the volume observed for the call options.

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The interest in Gilead’s call options was very bullish yesterday. On the surface it appears Gilead’s earnings report was a downer, but apparently some savvy option investors think Gilead has more potential for upside than for the downside. The flu season is just getting started and it appears we may be in for a lot of coughing and fever, so Gilead stands to benefit.

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A covered call investing position for Gilead for December looks interesting with a potential return of 4% with a time frame for realization of the return of only 58 days. The call option of interest is the December 45.00 with ticker symbol GDQLI.

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To enter the covered call investing position an investor would purchase the stocks in multiples of 100 shares for their trading portfolio and sell one call option for each 100 shares of stock purchased for their personal stock portfolio.

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PowerOptions’ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.

[tags] Truvada, Viread, Atripla, Emtriva, Hespera, AmBisome, Flolan, Vistide, Tamiflu, Macugen, Letairis, Cicletanine, BMY, Bristol-Myers Squibb Co., GILD, Gilead Sciences Inc., GSK, GlaxoSmithKline PLC [/tags]

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