Options Trading News

February 7, 2014  Fri 9:34 AM CT

CytRx surged on promising cancer-drug data in December, and now traders are placing a vote of confidence in the name.

optionMONSTER's marker scanners detected the sale of 5,000 March 5 puts for $0.25. Volume was more than 7 times previous open interest, which indicates a new position was implemented.

The investor is now on the hook to buy shares for $5 if they're below that level on expiration six weeks from now. Above it, they'll keep the premium as profit. (See our Education section for more on how to make money selling puts.)

CYTR is up 1.66 percent to $6.75 in morning trading. It announced on Dec. 11 that a phase II trial showed its aldoxorubicin drug was twice as effective as traditional chemotherapy in the treatment of soft-tissue sarcoma. The stock more than tripled by late January but has been pulling back since.

Total option volume is almost 3 times greater than average so far today.
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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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