Dynavax Technologies plunged last month, and one investor is
positioned for further bloodletting.
optionMONSTER's Depth Charge tracking program detected the purchase
of about 2,100 January 2.50 puts for $0.15 against open interest of
1,458 contracts. The trade dominated activity in the drug
developer, which normally sees volume of only about 440 calls and
puts in a single session.
The investor now has the right to sell DVAX shares for $2.50 on
expiration three weeks from now, no matter how far they decline. He
or she stands to earn leveraged profits in the event of a continued
decline but will lose their $0.15 if the stock doesn't drop. (See
section for more on put buying)
DVAX is unchanged at $2.74 in early afternoon trading. It peaked
around $5 several times in recent months but gapped sharply lower
on Nov. 16 after a Food and Drug Administration advisory panel
voted against approval of the company's Heplisav hepatitis B
vaccine. Shares traded as low as $2.22 after that event, so today's
put buyer could be looking for the stock to retest that level.
Puts outnumber calls by a bearish 23-to-1 ratio so far today,
according to the Depth Charge.
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