Gilead pullback draws downside play

As Gilead Sciences pulled back from an all-time high, a large trader on Friday positioned for further downside.

GILD finished the week at $56.87, down 0.7 percent on the session after peaking at $58.84 on Thursday. The biopharmaceutical company had gapped higher a couple of times in the last few weeks as it traded up from the $50 level.

optionMONSTER's systems show that 20,362 GILD options changed hands on Friday, compared to a daily average of just 4,600. A block of 6,000 January 52.50 puts was bought for $2.51 as a block of 6,000 January 45 puts was sold for $0.91. The volume was more than the previous open interest at each strike, indicating that this is new activity.

The put spread cost the trader $1.60, which is at risk if GILD remains above $52.50 through that expiration. It has a potential payout of $5.90 if the stock is below $45 at that time, where it last traded in February.

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