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December 31, 2012  Mon 11:20 AM CT

DVAX: SEE CHART GET CHAIN FIND STRATEGIES
Dynavax Technologies plunged last month, and one investor is positioned for further bloodletting.

optionMONSTER's Depth Charge tracking program detected the purchase of about 2,100 January 2.50 puts for $0.15 against open interest of 1,458 contracts. The trade dominated activity in the drug developer, which normally sees volume of only about 440 calls and puts in a single session.

The investor now has the right to sell DVAX shares for $2.50 on expiration three weeks from now, no matter how far they decline. He or she stands to earn leveraged profits in the event of a continued decline but will lose their $0.15 if the stock doesn't drop. (See our Education section for more on put buying)

DVAX is unchanged at $2.74 in early afternoon trading. It peaked around $5 several times in recent months but gapped sharply lower on Nov. 16 after a Food and Drug Administration advisory panel voted against approval of the company's Heplisav hepatitis B vaccine. Shares traded as low as $2.22 after that event, so today's put buyer could be looking for the stock to retest that level.

Puts outnumber calls by a bearish 23-to-1 ratio so far today, according to the Depth Charge.
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Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  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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