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Gilead Sciences, Inc. (GILD) call buyers anticipate an extended run into triple-digit territory
Gilead Sciences, Inc. (NASDAQ:GILD) is up 2.1% this morning to trade at $100.43, following encouraging comments surrounding the firm's hepatitis C drug, Sovaldi. As such, call volume has ramped up to 1.4 times the expected intraday pace.
GILD's most active option is the February 100 call, which appears to be seeing some buy-to-open activity. In short, these traders expect the stock to extend its run north of the round-number century mark through next Friday's close, when the front-month contracts expire. The shares haven't closed above $100 since Feb. 3, prior to a guidance-induced bear gap. However, with today's rally, delta on the at-the-money option has jumped to 0.55 from 0.36 at Tuesday's close, signaling an increased probability of an in-the-money finish.
As alluded to, GILD is running higher on positivity surrounding Sovaldi, as the company said it expects usage throughout Europe to increase dramatically this year -- and also expressed optimism that approvals for its combination pill, Harvoni, could be forthcoming. Elsewhere, WellCare Health Plans, Inc. (NYSE:WCG) has reaffirmed its alignment with GILD as its "clinical choice" for hepatitis C treatment.
Technically speaking, Gilead Sciences, Inc. (NASDAQ:GILD) has had a nice run over the previous 12 months. On a year-over-year basis, the shares have advanced 22.5%. However, after bouncing from their 200-day moving average, they're currently testing resistance in the $100 area, which corresponds with last week's downside gap and served as support on several occasions in the latter half of 2014.