Market News

December 1, 2016  Thu 6:45 AM CT

A large downside position was extended in Depomed yesterday.

OptionMonster's market scanner shows that 5,000 December 19 puts were sold for $1 while 5,000 March 19 puts were purchased for $2.80. Volume was below open interest in the December contracts, indicating that a bearish position was rolled forward by three months for $1.80.

Long puts lock in the price where a stock can be sold, so they make money if shares decline. Investors use them to hedge long positions or to speculate on a drop. (See our Education section)

DEPO fell 3.19 percent to $19.10 yesterday and is down 12 percent in the last month. The specialty-drug developer reported bearish results on Nov. 7 and is expected to announce its next quarterly numbers after the close on Feb. 21.

Overall option volume in the name was 4 times greater than average yesterday. Puts outnumbered calls by a bearish 12-to-1 ratio.

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