Cell Therapeutics Inc. (NASDAQ: CTIC) caught a boost this morning after the U.S. Food & Drug Administration (FDA) accepted its new drug application for pixantrone, an experimental drug for the treatment of relapsed, aggressive non-Hodgkin's lymphoma. The FDA's action date for review of pixantrone will be set by Sept. 4.
CTIC surged more than 6% out of the gate this morning, tagging a session high of $1.80, but the low-priced shares have since whittled their gains. The equity, which has rallied 1,107.1% year-to-date, is currently trading sideways between support at its 10-week moving average and resistance near the $2 level.
Following this morning's announcement, call volume has climbed on CTIC. Within the first hour of trading, more than 13,000 contracts changed hands at the equity's 2010 January 2.50 call, which carries open interest of 355,994 contracts. Four blocks totaling 1,500 contracts each traded at the ask price of $0.05, suggesting they may have been bought to open.
However, speculators appear to be wagering on continued weakness from CTIC during the short term. The stock's September 2.50 call is also active, with 1,229 contracts crossing the tape on open interest of 11,978. The majority of today's volume at this out-of-the-money strike appears to have been sold, with 88% of the morning's transactions occurring at the bid price.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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