IMGN UOA Predicts ABBV $31/Share Buyout (+1285% Trade)

IMGN UOA Predicts ABBV $31/Share Buyout (+1285% Trade)

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Twice in the past two weeks we’ve seen buy buying in IMGN (Immunogen) call options, targeted in December and January. With the stock trading at just $15.84, someone came in to buy the far out-of-the-money $20 strike call options for an average price of $0.70 per contract, expiring on December 15th. Then, just yesterday, they came in again to double-down on the January expiring $21 strike call options for an average price of $1.00. We didn’t know what they saw, but we knew this was highly unusual for this small stock — so we alerted UOA subscribers.

Then, today, we got the news this trader had been waiting for, and it all made sense.

A massive buyout from large-cap healthcare stock AbbVie (ABBV), causing IMGN to rocket to a 23-year high. 

That massive move led IMGN options to skyrocket in a way that the shares could simply never do, due to the huge leverage provided by short-dated OTM options. Those December options maxed out at $9.70 (+1,285% from the mid price to the max) — and those January options maxed out at $8.40 (+740% from the mid price to the max). 

This is why we trade unusual options activity. These are our favorite situations. When the smart money knows something, and they buy in big on an under the radar stock, only to foretell a massive piece of news. At Market Rebellion, we know that unusual options activity is the only way to look inside the minds (and wallets) of the Wall Street Elite. Whether this was a really great hunch, or a case of insider trading, it’s not important to us — what’s important is that we caught on to this curious trade and Rebels paid off big time

For more unusual options activity every single week, including trade ideas, technical analysis, and more, try Unusual Options Activity below.

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