Options Trading News

August 14, 2013  Wed 9:06 AM CT

Infinity Pharmaceuticals has been dropping since its earnings report last week, but one trader is looking for an end to that slide.

optionMONSTER's tracking systems detected the sale of 3,500 September 17 puts at the same second, led by a print of 3,419 that went for $0.75. This is clearly a new position, as open interest in the strike was just 385 contracts before the trade appeared.

The put seller is looking for the stock to stay above $17 through expiration in mid-September, at which time he or she would keep the $0.75 credit as profit. But if INFI is below that level, the trader will be on the hook to buy shares for an effective price of $16.25 when the credit is included. (See our Education section)

INFI is up 1.38 percent to $18.43 this morning. The drug maker has been falling steadily since reporting second-quarter results last Thursday, breaking below its 50-day moving average, and is trying to find support around current levels. It was trading above $22 before that release.

Today's put sale has already pushed total option volume in the name above its full-session average for the last month.
Share this article with your friends



The fastest money in the market
View full report »

Premium Services

Education & Strategy

Timing the Trade

Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »