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Astex receives vote of confidence

Mike Yamamoto (mike.yamamoto@optionmonster.com)

A large trader is betting that Astex Pharmaceuticals will not break below its recent range.

optionMONSTER's tracking systems detected the sale of 5,000 September 5 puts at the same second for $0.20 yesterday. This is clearly a new position, as the volume was well above the strike's open interest of 2,539 contracts before the trade appeared.

The put seller is looking for ASTX to stay above $5 for the next month, at which time he or she would keep the $0.20 credit as profit. If the stock falls below that level, the trader would face the obligation to buy shares for an effective price of $4.80 once the credit is included. (See our Education section)

ASTX was down 0.93 percent yesterday to close at $5.43. The oncology and hematology drug company has been trading sideways since quarterly results were announced on Aug. 1, staying mostly between $5 and $5.50.

Yesterday's short puts made up almost all of Astex's option volume, which was more than 11 times its daily average for the last month.

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