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Amarin faces big bearish position

Chris McKhann (chris.mckhann@optionmonster.com)

Unusual short-term put trading dominates today's option action in biopharmaceutical company Amarin.

optionMONSTER systems detected the purchase of more than 10,000 October Weekly 5.50 puts that expire at the end of tomorrow's session. A trader bought a block of 4,500 for the bid price of $0.15 and another block of 5,000 a few minutes later for $0.19. The previous open interest in the strike was just 730 contracts, so this is fresh buying.

These are very short-term contracts with a delta of just 0.18 , suggesting just an 18 percent probability that they will expire in the money . The implied volatility of those puts is 282 percent, while the 20-day historical volatility is 50 percent. (See our Education section)

AMRN is up 0.79 percent to $6.35 this morning. The drug developer was as high as $7.40 on Tuesday and as low as $6.17 yesterday. It hasn't been as low as $5.50 since mid-August.

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