What's behind put surge in MannKind


MannKind is continuing to run higher but is facing a downside option position today.

Yesterday we saw call trading in January, but today it is the puts that lead the way. optionMONSTER systems show that a trader bought 4,000 October 7 puts for $2.15 and, seconds later, sold 9,000 October 4 puts for the bid price of $0.51. Volume was more than open interest in each strike, so this is a new put ratio spread . (See our Education section)

That spread is slightly in the money and risks little if shares continue to climb. It takes a maximum profit if MNKD falls back down to the $4 level, while below that the trader faces the obligation to buy shares.

MNKD is up another 7.87 percent to $6.72 this afternoon after climbing to $6.99 in the morning. Shares were down at $4 two weeks ago.

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