Put seller looks for Endo's slide to end


Shares of Endo Health Solutions hit a two-year low at the end of last week, but one trader is looking for current levels to hold in coming weeks.

More than 1,700 January 25 puts were sold in about 1 minute with less than an hour to go in Friday's session, almost all of them for $0.90, according to optionMONSTER's Depth Charge system. The volume was well above the strike's open interest of 682 contracts at the start of the session, indicating new activity.

ENDP fell 3.86 percent on Friday to end the week at $25.62, its lowest close since August 2010. Shares of the pharmaceutical company have gapped lower twice since early November on disappointing earnings and guidance. The company's leading product, the pain-relieving patch Liboderm, is expected to face serious competition from a generic rival by Watson Pharmaceuticals next September.

The put seller is looking for the shares to close above the $25 strike price at expiration in less than five weeks. The trader faces the obligation to buy the stock if it is below that level, though the effective price would be $24.10 including the credit from the put sale. (See our Education section)

Friday's trading pushed total option volume in the name to 16 times its daily average in the last month.

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