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Trader bets against collapse in Gilead

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Gilead Sciences hit an all-time high last week, and one long-term trade is betting that the stock won't collapse.

optionMONSTER's tracking systems detected the sale of 2,000 January 2015 25 puts in one print for $0.88. Open interest in the strike was only 104 contracts before the session began, so this is clearly a new position.

GILD rose 1.07 percent to $45.43 on Friday. The biopharmaceutical stock spiked to a lifetime high of $45.58 last Tuesday after reporting encouraging data on an experimental pill used to treat HIV patients.  

Friday's put seller apparently believes that GILD will stay above $25 for nearly two years. If the stock falls below that level, the trader will face the obligation to buy shares at an effective price of $24.12 when the credit from the put sale is included.(See our Education section)

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