Star Scientific is seeing a large put trade even as the stock climbs toward its highs of a year ago.
CIGX is up 4.07 percent to $4.86, on pace for the highest close since June 2011, when it hit a 52-week high just above $5. The tobacco company's shares were down at $3 a month ago and near $2 early this year.
A trader sold 4,000 August 3.50 puts for the bid price of $0.10 against open interest of 4,714 contracts. Seconds earlier the trader bought 4,000 August 4 puts for the ask price of $0.30 against open interest of 3,662.
So this could be a vertical spread, paying $0.20 to possibly make $0.30 if shares are below $3.50 at expiration. But it could also be a roll, with the trader moving the long put position to the higher strike as the stock runs up. The latter would provide more bang for the buck--or more hedging power--if CIGX retreats. (See our Education section)
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