Onyx Pharmaceuticals draws put sale
Mike Yamamoto | [email protected]
optionMONSTER's tracking systems detected the sale of 2,500 May 70 puts this morning for $2.75. The volume dwarfed the strike's open interest of just 79 contracts at the start of the session, clearly showing that this is a new position.
ONYX is down 3.13 percent to $80.82, a day after announcing that a secondary stock offering. That move led R.W. Baird to cut its price target on the name to $96 from $99 this morning, though the firm maintains an "outperform" rating on the stock.
Shares of the biopharmaceutical company began 2013 with a strong rally but hit resistance at the $86 level last week and have been falling since then. The company is scheduled to report fourth-quarter and full-year results after the close on Feb. 21.
Today's put seller is looking for the stock to close above the $70 strike price at expiration in mid-May. If ONYX is below that level, the trader will face the obligation to buy shares at an effective price of $67.25 once the credit from the put sale is included. That is near support levels going back to mid-July. (See our Education section)
Total option volume in the name is already double its full-session average for the lats month.