Learn the trade here. Make it on tradeMONSTER

Options Trading News

June 11, 2013  Tue 10:45 AM CT

MNKD: SEE CHART GET CHAIN FIND STRATEGIES
A large put trade is positioning for a big drop in biopharmaceutical company MannKind, which hit new highs this morning.

optionMONSTER systems show that a trader sold 9,000 January 4 puts for $0.69 and, seconds later, bought 4,000 January 7 puts for the ask price of $2.31. The volume at each strike was more than 3 times higher than the strike's open interest before the trade appeared, indicating that this is a new ratio spread.

This sale of the lower-strike puts greatly offsets the cost of the higher contracts. The trade could be looking for shares to fall to $4 but not below that level, or it could also a relatively low-cost protective hedge against a pullback in the stock. (See our Education section)

MNKD is up 6.03 percent to $7.95 near midday trading after peaking at $7.97, a 52-week high. It was down at that $4 a month ago and near $2 at the start of December. 
Share this article with your friends


Premium Services

Free Webinars

How Can Equity Traders Beat the Algos

Education & Strategy

When to go in or out of the money

Some of our subscribers recently asked how to gauge positions that are in or out of the money, so I...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER