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More put selling in Cell Therapeutics

Chris McKhann (chris.mckhann@optionmonster.com)

Cell Therapeutics has drawn heavy put selling in recent months, and the drug developer is seeing the same trade again today.

optionMONSTER systems detected the sale of 10,000 March 2 puts, all but a handful of them for $0.48. This is clearly a new position, as open interest at that strike was just 280 contracts before the trade appeared.

The put seller is looking for CTIC to stay above $2 through expiration in mid-March, apparently believing that the option premium is pricing in too much volatility. The trader may also be looking to buy the stock at a discount through the sale of the puts and assignment of shares, as the effective purchase price would be $1.52 when that credit is included. (See our Education section)

CTIC is up a penny at $1.75 this morning and has traded in an increasingly tight range. The 20-day historical volatility has fallen from 130 percent in October to its current level of 36 percent. The stock was above $2 three weeks ago.

The name last saw put selling in the March 1.50 strike a week ago .

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