Market News

July 1, 2013  Mon 12:20 PM CT

Astex Pharmaceuticals has pulled back following a big move, and traders think it's on solid ground.

optionMONSTER's tracking systems detected the sale of 5,000 July 4 puts for $0.16. Volume was more than twice previous open interest at the strike, indicating that this is a new position.

In return for the $0.16 credit, the investor is now on the hook to buy shares of the drug developer for $4 if they're below that level on expiration. The put seller probably likes the stock and would be willing to get long at that price. This way, he or she can squeeze a few cents from the name even if they never own it. (See our Education section for more)

ASTX is up 6.08 percent to $4.36 in afternoon trading. It doubled between late February and late April after a strong earnings report, only to roll over and surrender most of those gains. In the last week, however, it's been finding support above its 200-day moving average, which could be leading some chart watchers to believe that a bottom is in.

Total option volume is almost quadruple its daily average so far today. The name also saw put selling in June, April, and March.
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