How Options Trading May Impact Genzyme Post-Merger Trading (GENZ, SNY)

Here is what traders and investors need to know about and care about.  There was a huge amount of concern that Henri Termeer would manage to drive Sanofi-Aventis away.  So arbitrage spreaders and investors who were sitting on great gains were buying PUTS to protect the position.  The open interest for the FEB-2011 was almost 190,000 contracts in the available PUTS alone.  The open interest in the CALLS was for FEB-2011 was about 100,000 contracts. On Monday, that open interest was reaching a record.

The MARCH-2011 CALLS had a larger open interest than the PUTS due to the time value and betting patterns of investors when it comes to M&A investing.  This might not matter as much as it would have if the merger would have hit a terminal snag, but it is what traders and investors need to know now.

If you want to know which other biotech outfits may be acquisition targets, we created a list of about 15 potential biotech M&A targets for BioHealthInvestor.com at the end of January.  Nothing has changed as far as that list is concerned.

JON C. OGG