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April 11, 2013  Thu 10:03 AM CT

CTIC: SEE CHART GET CHAIN FIND STRATEGIES
A huge trade is betting that Cell Therapeutics will not become a penny stock.
 
More than 20,000 CTIC options have change hands already today, compared to a full-session average of 1,100 contracts in the last month. Virtually all of that volume is in one trade.

optionMONSTER systems detected the sale of 20,000 June 1 puts for $0.06 this morning. The volume was twice the previous open interest in the strike, clearly showing that this is a new position.

The put seller apparently believes that the cancer-drug developer will continue holding above $1 in coming months. He or she is also willing to buy shares if they fall below that strike price. Such "nickel" strategies have a high probability of profit but also high risk, as they are usually leveraged up to get a reasonable profit. (See our Education section)

CTIC is up fractionally at $1.17 today. It has tested support at $1 in the last few weeks but hasn't traded below that key level since gapping higher at the start of September.
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Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

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