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Trader sees limit to Infinity downside

Chris McKhann (chris.mckhann@optionmonster.com)

Infinity Pharmaceuticals is just off its 2013 lows, but one trader apparently believes that further downside will be limited.

optionMONSTER systems show that one print in the May 30 puts dominates trading in Infinity so far and already tops its total daily average in the last month. A trader sold 3,500 of those puts for the $0.20 in volume well above the strike's previous open interest of 1,144 contracts, indicating that this is a new position.

The put selling is a bet that INFI will hold up above $30 through the end of the week. This is so-called nickel strategy , as it takes in the small credit and has a high probability of profit but faces potentially large losses if shares move quickly. (See our Education section)

INFI is up 0.64 percent to $33.20 this morning. The stock was above $50 at the start of April but fell to $30.50 last week, its lowest level since mid-December.

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