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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. 
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Education & Strategy

The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

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