Progenics Pharmaceuticals is back to a key resistance level, and one investor is bracing for a pullback.
optionMONSTER's Depth Charge monitoring program detected the purchase of 1,000 May 9 puts for $0.38 and the of an equal number of May 11 calls for $0.63. Volume was more than twice open interest at both strikes.
The trade resulted in a credit of $0.25 and ensures the investor a minimum price of $9.25 on PGNX in the event of a pullback. He or she also agreed to accept a maximum selling price of $11.25 if the stock closes at or above $11 on expiration. That's roughly the same level where it peaked in late 2008 and early 2009, which could be leading some chart watchers to believe that it will continue to hold the shares in check.
PGNX fell 0.47 percent to $10.63 yesterday but is up more than 60 percent in the last six months. The company's only drug on the market is Relistor, a constipation treatment for patients using narcotic painkillers.
Known as a collar , yesterday's option transaction is a common strategy when investors think a stock is due for a pause but don't want to exit their position. (See our Education section for more hedging ideas.)
Overall option volume was 35 times greater than average in the session.
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