Bluebird Bio Inc. (NASDAQ:BLUE)

A company making big strides in gene therapies for genetic diseases and cancer.

As a "clinical-stage company," Bluebird performs a lot of the early research to see what does and doesn’t work on certain diseases. Any treatments that Bluebird then develops can be sold or licensed to larger drug companies for mass production.

The biotech is particularly known for its cancer treatment "bb2121," which is partly licensed by Bristol-Myers (BMY).

BLUE also has a pipeline of other potential therapies that could eventually be great for BMY if and when they are approved by the FDA.

And I think this pipeline of potential treatments is the reason for the mysterious trades that our One Day Bonus Indicator picked up on.
You see, if BLUE develops a working therapy for a disease that affects a large group of people worldwide, it could be worth tens of billions of dollars to a giant drug company like BMY.

And since BMY and BLUE already have a licensing arrangement, it’s easy to imagine that BMY will hear rumors of any of BLUE’s successes before the news goes public.

That brings into focus a series of options trades of late.

Those transactions include a major buy of January $200 call contracts on BLUE and January $240 call contracts.
The thing is, BLUE shares currently trade for around $55. So the $240 calls will only pay off if BLUE’s price jumps 320%!

Could certainly speculate that the only reason a trader in his right mind would make this type of speculative trade is if he had some sort of high-conviction information about what’s happening behind the scenes at BLUE. It just wouldn't make sense otherwise.

It may be a chance to score big on a buyout of this small biotech development company.

Initiate a buyout play before a big drug company swoops in and makes a major buyout announcement!

The company already has a license agreement with BMY, and could be a juicy target for BMY to take over entirely.

But even if a deal doesn’t materialize, we can still do quite well with this trade. BLUE has a number of promising therapies in the pipeline and could quickly monetize any approved drug by licensing to a major distributor.