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Why puts are bullish on Raptor

Chris McKhann (chris.mckhann@optionmonster.com)

Unusual put trading is bullish on Raptor Pharmaceuticals, which is trading near lifetime highs.

More than 5,000 August 20 puts have traded for the bid prices of $4.80 to $4.50 this morning. This is a new position, as there was no previous open interest in the strike, and the total daily average volume in the name is just 687.

These puts were sold in the money , which is unusual, but the trader is clearly bullish on the stock. The put seller will collect roughly $1.45 in premium if the stock does nothing, and the strategy will outperform just buying shares unless they are above $24.50 or so at expiration. (See our Education section)

RPTP is up 3.7 percent to $16.77, just off Thursday's all-time highs in the stock. Shares were below $15 on Wednesday before gapping higher.

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