Cautious trade before Myriad results
David Russell | email@example.com
optionMONSTER's Depth Charge monitoring system detected the purchase of 1,000 September 23 puts for $0.64 and sale of an equal number of September 28 calls for $0.64. There was barely any open interest in either strike before the trade appeared.
The position cost essentially nothing to open and is leveraged to downside in the drug maker. It will make money on a drop below $23 and force the investor to sell shares above $28--a level it hasn't seen in almost three years.
MYGN is down 1.24 percent to $25.58 in morning trading but is up 22 percent so far this year. Earnings and revenue beat expectations the last results came out on May 1, when management also raised guidance. The previous release in January was strong as well.
With the next report scheduled for after the bell on Aug. 14, today's trader is apparently looking for a hedge. He or she probably owns stock and would be willing to unload on a rally to $28. The main thing they seem to want is downside protection in the event of a drop. (See our Education section for more on the strategy, known as a collar.)
The trade pushed total option volume in the name to 11 times greater than average.