Options Trading News

October 10, 2012  Wed 3:47 AM CT

Drug developer Celsion drew bearish option trading for the second consecutive session yesterday.

optionMONSTER's Depth Charge system detected the purchase of 3,000 February 3 puts on Monday, and that was followed by action in the February 2 puts yesterday. A trader bought 6,500 of those contracts for the ask price of $0.60 with no open interest at that strike, so it was fresh positioning.

CLSN dropped 9.5 percent yesterday to finish at $5.33, its lowest close since Sept. 17. Shares have traded above $6 a couple of times since then, posting an all-time high in the process. The oncology-pharmaceutical stock was below $2 into the start of June.

The put buying of the last two days is betting that CLSN will give up its recent gains and return to its earlier lows. It is very unlikely that this is protective hedging on long positions, given how far out of the money these puts are. (See our Education section)
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The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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