Apple was ordered to pay VHC more than $500 million on patent infringement
Shares of VirnetX Holding Corporation (NYSEAMERICAN:VHC) have jumped 17.3% to trade at $4.75, after the security technology firm was awarded $502.6 million in damages after a federal jury in Texas found Apple (AAPL) guilty of patent infringement. Today's pop has VHC stock trading at its highest level since mid-November, and breaking free from its 200-day trendline -- a former layer of support that had served as a stiff layer of resistance over the past five months.
Options traders have been eyeing this technical ceiling in recent weeks. Over the past 10 days, the stock's April 4 and 5 calls saw the biggest increases in open interest, and data from the major options exchanges confirms the lower-strike calls were bought, while the higher-strike ones were sold. This suggests the front-month options were being used to initiate long call spreads.
Outside of the options arena, sentiment toward the tech stock is distinctly bearish. More than 12.3 million VHC shares are sold short, representing 24.6% of the security's available float. What's more, it would take shorts nearly 50 sessions to cover these bets, at the average pace of trading -- though this number is likely lower amid today's high-volume trading, with some of these traders helping to fuel this morning's fire.