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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Invest Like a Monster - San Antonio: October 9-10

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The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

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