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SVNT 100% Rate It Posted 8/9/2011 4:25 AM by David Russell from optionMONSTER in Investing, Options 0 comments | Like itDon't like it Referenced Stocks: SVNT Savient Pharmaceuticals was falling even before the market plunged, and the bears are hungry for more downside.
optionMONSTER's Depth Charge tracking system detected a surge of put activity in the company, which sells the gout drug Krystexxa. The first trade occurred in the morning, when more than 4,500 September 8 puts were sold for $3.95 to $4 and an equal number of September 4 puts were bought for $0.70 to $0.75.
Volume was below open interest in the higher-strike contracts, indicating that an existing position was rolled down. The transaction let the investor collect a credit of about $3.25 while maintaining exposure to further downside.
A second transaction occurred in the afternoon when an additional 5,000 September 4s were purchased for $0.90, reflecting more bearishness.
SVNT fell 8.43 percent to $4.02 yesterday and is down 64 percent so far this year. It traded over $20 last September and October after putting itself up for sale but then failed to find a buyer and has been falling ever since.
Overall option volume was more than 10 times greater than average in the name yesterday. Puts outnumbered calls by more than 6 to 1, according to the Depth Charge.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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