More put selling in Cell Therapeutics

Chris McKhann (
December 20, 2013

Cell Therapeutics has drawn heavy put selling in recent months, and the drug developer is seeing the same trade again today.

optionMONSTER systems detected the sale of 10,000 March 2 puts, all but a handful of them for $0.48. This is clearly a new position, as open interest at that strike was just 280 contracts before the trade appeared.

The put seller is looking for CTIC to stay above $2 through expiration in mid-March, apparently believing that the option premium is pricing in too much volatility. The trader may also be looking to buy the stock at a discount through the sale of the puts and assignment of shares, as the effective purchase price would be $1.52 when that credit is included. (See our Education section)

CTIC is up a penny at $1.75 this morning and has traded in an increasingly tight range. The 20-day historical volatility has fallen from 130 percent in October to its current level of 36 percent. The stock was above $2 three weeks ago.

The name last saw put selling in the March 1.50 strike a week ago .

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