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Bears hoping to capsize Catamaran

David Russell (david.russell@optionmonster.com)

Catamaran has been advancing steadily, but one investor is bearish before today's earnings report.

optionMONSTER's Depth Charge tracking program detected the purchase of about 2,700 July 55 puts for $3.30. Almost 4,000 July 50 puts were sold around the same time for $1.45 in volume that was below that strike's open interest. This suggests that an existing position was closed and rolled to the higher strike.

The transaction cost about $347,000 and increased the investor's downside exposure to the pharmacy-benefits company. While trader now owns a smaller number of contracts, he or she boosted the position's net delta to -1,075 from -829, meaning that they will track declines in the stock price more closely. (See our Education section for more on option greeks .)

CTRX fell 1.25 percent to $57.01 yesterday but is up 21 percent so far this year and hit a new all-time high on Tuesday. It's been climbing along with other companies in its industry group as seen on our researchLAB service, but it issued weak guidance following two of its last three earnings reports.

The company also grabbed some attention after a complex bullish trade on March 21, which has already appreciated by more than 2,000 percent.

Total option volume in the company was 11 times greater than average yesterday, according to the Depth Charge. Puts outnumbered calls by more than 9 to 1.

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