Puts show support for Pharmacyclics
David Russell | firstname.lastname@example.org
optionMONSTER's tracking systems detected the purchase of about 4,300 January 18 puts, most of which priced for $0.80. There was no open interest in the strike before the trade appeared.
The trader is now obligated to buy shares in the drug developer, which has more than quadrupled in the last year as investors anticipate a successful commercialization of its PCI-32765 compound as a potential treatment for non-Hodgkin's lymphoma.
PCYC has consolidated since that big run and has been slowly grinding higher while remaining mostly before $23 and $28. It's up another 3 percent to $28.16 in late morning trading today.
The next likely support would probably be between $18 and $20, which is where it consolidated in late February and early March. The put seller appears to be targeting that level. The strategy frequently appeared in PCYC as it rallied in late 2011 and early 2012. (See our Education section)
Overall option volume is almost 5 times greater than average so far today.