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May 23, 2013  Thu 2:45 AM CT

ARIA: SEE CHART GET CHAIN FIND STRATEGIES
Ariad Pharmaceuticals is trying to break out of its recent range, and one trader is betting on a floor beneath the stock.

optionMONSTER's tracking systems detected the sale of 2,500 August 15 puts in one print for $0.33. This is clearly a new position, as open interest in the strike was a mere 38 contracts before the trade appeared.

The put seller is looking for ARIA to stay above the $15 strike price through mid-August. If it falls below that level, the trader will be on the hook to buy shares at an effective price of $14.67 once the $0.33 credit from the put sale is included. (See our Education section)

ARIA rose 5.13 percent to close at $18.43 yesterday, just above its 50-day moving average, after hitting a two-month high of $19.64 in the morning. The stock was above $22 in mid-March but fell sharply in the next several sessions and has been trading sideways since.

RBC Capital reiterated its "outperform" rating and $36 price target on Ariad yesterday. Total option volume in the name surpassed 11,700 contracts in the session, more than 11 times its daily average for the last month.
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Education & Strategy

The Strike-Based Greeks

The other Greeks (Gamma, Vega, and Theta) are calculated by using month and strike data, and not by individual option. These are called strike-based Greeks. Gamma, Theta, and Vega are all strike-based Greeks

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