OptionsHouse

Options Trading News

November 28, 2012  Wed 3:16 AM CT

CLSN: SEE CHART GET CHAIN FIND STRATEGIES
Celsion hit an all-time high before pulling back yesterday, but its option activity was led by an apparently bearish trade.

CLSN ended the day down 2.82 percent at $7.58 after reaching a high of $8.35 earlier in the session. The cancer-drug developer was down at $2 in mid-June but bounced off support at $4.30 early this month.

A February put spread topped the action. A trader sold 5,000 February 2 puts for the bid price of $0.70 against open interest of 6,260 contracts, according to optionMONSTER's tracking systems. At the same time, he or she bought 5,000 February 4.50 puts for the ask price of $2.25 in volume that was more than the previous open interest at that strike, so it was a new position.

This could be a roll, with the trader selling the lower-strike puts and buying the higher contracts to get more bang for their buck, or delta, on a pullback. Alternatively, it could be a new vertical spread that would take a maximum gain if shares are back down around $2 by that expiration.

In either case, this doesn't appear to be hedging on a long position because of how far out of the money the puts are. Celsion saw bullish option trading twice in the last week.
Share this article with your friends


OptionsHouse

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Upcoming Webinar:

Using Options For Income

http://bit.ly/1nY1OKA

Jon Najarian and Adam Mesh of Options Wealth Machine discuss a detailed strategy utilizing credit spreads to generate income, and how any level of trader can use this simple trading technique.

Education & Strategy

Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

View more education articles »