OptionsHouse

Options Trading News

March 25, 2013  Mon 12:02 PM CT

DNDN: SEE CHART GET CHAIN FIND STRATEGIES
Biotech Dendreon keeps falling, but the bulls are still buying.

optionMONSTER's Heat Seeker tracking system detected the purchase of 3,500 August 6 calls for $0.44 and sale of an equal number of August 4 puts for the $0.46 bid price. Volume surpassed previous open interest at both strikes, indicating that a new combination trade was initiated.

The trader received a credit of $0.02, which will be the profit if DNDN remains between the two strikes. Above $6, they'll make money, while they'll face losses below $4 because they'll be forced to buy shares at that price. The strategy provides cheap upside exposure with a good chance of the whole position expiring worthless. See our Education Section for more on how to manage positions using options.

DNDN fell 2.86 percent to $4.75, its lowest level since December, and peaked over above $7 last month. The bullish trade pushed total option volume to almost twice the daily average in the company so far today.
Share this article with your friends


OptionsHouse

Premium Services

Education & Strategy

Vega

There is another Greek which measures the effects on an option's price buy changing the amount of extrinsic value in the option, and that Greek is Vega...

View more education articles »