Options Trading News

May 15, 2013  Wed 2:14 AM CT

Shares of Myriad Genetics have rocketed higher in recent days, and one trader is looking for a sharp move up or down in the next few months.

optionMONSTER systems show that a trader bought 6,000 July 31 puts, led by block of 5,324 that went for the ask price of $2.50. This is clearly new positioning, as open interest in the strike was a mere 74 contracts before the session began.

Less than a minute later, the biggest block of MYGN stock traded as 200,000 shares were bought for $33.82. The combination of stock and options creates delta-neutral strategy that would profit from higher volatility and/or for shares to rise sharply in either direction. The trade followed bullish call buying in the previous session. (See our Education section)

MYGN rose 2.99 percent to $34.10 yesterday, its highest close since June 2009, as shares continued to climb from the $28 level in just the last week. Total option volume in the medical-diagnostics company was 7,243 contracts, compared to a daily average of 946 in the last month.

Myriad has made news this week on reports that actress Angelina Jolie decided to have a double mastectomy after taking the company's BRACAnalysis test for genetic markers indicating the potential for breast or ovarian cancer.
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Timing the Trade

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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