Complex three-way play in InterMune
Chris McKhann | firstname.lastname@example.org
ITMN is up 1.6 percent to $12.05 today. The biotechnology company has been hovering between $11 and $12 for the last couple of weeks after falling from above $15. Shares were above $50 last May and hit a 52-week low around $11 in December.
More than 10,600 ITMN options have changed hands already this morning--10 times its daily average--and virtually all of that volume is in one three-way spread. A trader bought 2,593 July 12 calls for $2.04 while at the same time selling 3,890 each of the July 14 calls for $1.02 and the July 10 puts for $0.72.
The transaction results in a net credit, which the trader will keep if shares are between $10 and $12. The maximum profit comes if ITMN is at $14 by the July expiration. Shares were above that level on April 9. (See our Education section)