The Key Level Biogen Inc (BIIB) Options Traders are Watching

Drugmaker Biogen Inc (NASDAQ:BIIB) announced yesterday that current Chief Commercial Officer Michel Vounatsos will take over as CEO in early January. While the shares initially sold off on the news -- which was released just before the closing bell -- on diminished M&A expectations, the stock has reversed course today, trading up 2.2% at $285. In fact, an analyst at Mizuho said Biogen's inside choice for its new chief executive means "the company is still in play … and whatever M&A value in the stock has been more or less retained," even as Credit Suisse trimmed its price target on the stock to $312 from $322. Meanwhile, BIIB's options pits are buzzing with speculators taking aim at a key technical level.

Jumping right in, BIIB calls are changing hands at 1.6 times the expected rate for this point in the day. Leading the action is the January 2017 300-strike call, with more than 1,400 contracts on the tape. Per data from the International Securities Exchange (ISE), there has been a healthy mix of buy- and sell-to-open action at this strike so far. Buyers of the call are hoping BIIB will rally beyond the round $300 mark before the front-month expiration, on Friday, Jan. 20. Call sellers, on the other hand, are betting the strike will serve as a short-term ceiling for the shares.

This is hardly the first time this strike has attracted attention, either. In fact, the January 2017 300-strike call not only saw the largest rise in open interest over the past 10 sessions, but it's also home to peak open interest among all BIIB options, with more than 8,000 contracts in residence. Data from the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) confirms that many of these positions have been bought to open, as well.

Overall, call buying has been a popular strategy among BIIB options traders, with the stock's 10-day call/put volume ratio across the ISE, CBOE, and PHLX seated at 1.47. On the other hand, near-term traders are more put-skewed than usual toward the stock. Specifically, BIIB's Schaeffer's put/call open interest ratio (SOIR) of 0.96 ranks higher than 71% of the past year's readings. Nevertheless, some of the put activity has been at the hands of sellers, considering options traders have sold to open 1.5 puts for each one they've bought over the past 10 sessions.

Elsewhere, BIIB seems to be surrounded by optimism. Short interest dropped off by more than 12% during the most recent two-week reporting period, and now accounts for just over 1% of the equity's available float. Plus, 12 out of 16 analysts maintain a "buy" or better opinion toward BIIB, without a single "sell" rating on the books.

Despite this optimism, BIIB hasn't been particularly impressive from a technical perspective. The stock is off almost 7% year-to-date, and has been falling hard since being rejected at the $325 level last month -- near its early August highs. The stock is now staring up at the overhead $300 mark, which could be tough to crack. The round-number level provided support for Biogen Inc (NASDAQ:BIIB) through the latter half of 2014, and capped the stock's losses in its mid-2015 bear gap, but has caused trouble for the shares numerous times over the past few months. On the upside, however, the shares are poised above support at the 40-week moving average, as well as the $280 level, which has served alternately as support and resistance this year.