Market 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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Using puts to BUY stock

Puts are an options contract that gives buyers the right to sell their stock for a set price on or before a future date. However, puts can also be an effective way to BUY stock.

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