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Trader bets on end to Infinity's slide

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Shares of Infinity Pharmaceuticals have fallen off a cliff in the last six months, but one trader apparently believes that the steep slide is finally ending.

optionMONSTER's tracking systems detected the sale of 3,500 October 16 puts in one print for the bid price of $0.30. Open interest in the strike was just 575 contracts before the trade appeared, so it is clearly a new position.

This put seller will keep that $0.30 credit as profit if INFI remains above $16 by expiration at the end of next week. If it falls below that level, the trader will be on the hook to buy shares at an effective price of $15.70. (See our Education section)

INFI ended Friday unchanged at $16.78, its lowest closing level since July 1 and down about 17 percent in the last month. The drug developer, which was above $50 as recently as April, broke below its 50-day moving average two weeks ago and has been drifting lower since.

Total option volume in the name topped 5,700 contracts on Friday, 6 times its daily average for the last month.

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