As Merck jumps to five-year highs, a large trader is betting on a floor beneath the pharmaceutical giant's shares.
optionMONSTER systems show that a trader sold 9,600 October 45 puts in one print for the bid price of $1.09. The volume was 3 times higher than the strike's previous open interest, so this is a new position.
Shares of MRK are up 4.6 percent to $48.84, even though they are off the best levels of the session. They hit a high of $49.36 earlier this morning, the best level for the stock since January 2008. Shares bounced off support at $41 in February.
Today's put selling has a mildly bullish bias, as the trade can profit with MRK anywhere above $43.91 at expiration. The maximum profit would be realized with MRK above the $45 strike. (See our Education section)
More than 102,000 MRK options trade, three times the daily average over the last month.
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