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Trader counts on floor beneath Exelixis

Chris McKhann (chris.mckhann@optionmonster.com)

Put selling tops today's option action in biotechnology company Exelixis.

EXEL is up fractionally on the day at $4.78. The stock has found support around $4.25 in the last six weeks after trading just shy of $7 at the end of July.

optionMONSTER's systems show that a trader sold two blocks of 2,289 and 1,000 December 4 puts for the bid price of $0.45 on a wide bid/ask spread. The previous open interest was just 516 contracts, so this is new activity.

The put selling is a bet that EXEL will hold above the $4 strike price through the end of the year. The trader is also showing the willingness to buy shares if they are below that level at expiration. (See our Education section)

The implied volatility of those puts is 89 percent, while the 30-day historical volatility is 63 percent and the 20-day reading is 45 percent.

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