Millennium Pharmaceuticals Sees Brisk Trade in Its Calls and Puts
Dow Jones Newswires</br></br>Options at Millennium Pharmaceuticals were active amid a leap in expectations for overall market volatility.</br></br>Millennium's September 12.50 calls traded 9,005 contracts, compared with 7,769 outstanding, and rose 10 cents to 20 cents at the Chicago Board of Options Exchange. Its September 10 puts also were active, trading 1,466 contracts and gaining 20 cents to 60 cents. The heavy trading came amid a surge in implied volatility -- a gauge of traders' expectations of stock-price swings. Millennium stock shed 30 cents, or 2.9%, to $9.88 a share on the Nasdaq Stock Market.</br></br>Some observers interpreted the options activity as a bullish sign for stock in the Cambridge, Mass., drug company. "Shorts are scared," said Walter Lamerton, head of options at SG Cowen & Co. "They're afraid something's getting ready to come out and they're going to get hurt."</br></br>A possible driver, some observers said, is a coming Food and Drug Administration hearing about a cancer drug developed by Millennium rival Celgene. Investors have worried that if Celgene's Revlimid drug wins FDA approval, it could erode the market share of Velcade, one of Millennium's key drugs.