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Biodel attracts vote of confidence

Mike Yamamoto (mike.yamamoto@optionmonster.com)

A trader is betting that Biodel will hold above a key support level for the next month.

optionMONSTER's tracking systems detected the sale of 2,500 August 4 puts in one print for $0.30 today. This is clearly a new position, as the volume was far above the strike's open interest of just 360 contracts before the trade appeared.

The put seller will keep the $0.30 credit as profit if BIOD remains above $4 through expiration one month from today. If the stock is below that level, the trader will be on the hook to buy shares at an effective price of $3.70 including the credit. (See our Education section)

BIOD is off 1.33 percent to $4.43 this morning. The diabetes-drug developer is down from a 52-week high of $5.11 reached on June 21 but is still near the top of a narrow range in place since then. It has dipped below $4 only twice since May 30.

Total option volume in the name is more than 15 times its daily average for the last month. Overall calls outnumber puts by 16 to 1. 

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