Paper paid .25 to be long 8,500 XBI Jan 63.5-65 call spreads.
SPDR S&P Biotech ETF, trading 59.23 (up .04) with an IV30 of 38.18 and an HV10 of 26.08, saw a bullish call spread trade today.? The stock with an ADV of 33,500 contracts and OI of 435k saw a customer buying 8,500 of the Jan 63.5 calls paying .47 and against it the trader sold 8,500 of the Jan 65 calls at .22. Net the customer paid .25 to be long the Jan 63.5-65 call spread.? In addition to this trade there has also been active buying of the Jan 61 calls via intermarket sweeps totaling 3700 so far.
?Based on open interest this trade is either an opening transaction or a roll down to acquire more deltas.? The OI on the 65 strike has OI of 15,500, but the 63.5 has less than 3k OI.? Thus regardless of the action the bias of this trade is to get longer delta and the trader wants the stock to move higher.
This trade is bullish XBI and bullish XBI volatility.