Array gets a big vote of confidence


Array BioPharma shares have been tumbling this week, but one trader apparently believes that further losses will be limited.

More than 16,000 ARRY options changed hands yesterday, compared to a daily average of just 359 in the last month. Virtually all of the volume was in one trade.

optionMONSTER systems detected the purchase of 8,000 December 5 puts for $0.35 and the sale of 8,000 March 5 puts for $0.85. Volume was below previous open interest in the December contracts but above it in the March strike.

This could be a short calendar spread , but it is far more likely that the trader is rolling a short put position forward by three months to get more time for the strategy to work. He or she is now betting that ARRY will stay above $4.15 through expiration in mid-March. (See our Education section)

ARRY fell 4.52 percent to $4.86 yesterday, its lowest close since the beginning of July. The drug company came into the week at $6.

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