Biodel has major clinical data due later this year, and one
investor tailored a strategy in hopes of good news.
optionMONSTER's tracking systems detected the purchase of 4,000
September 4 calls for $0.50 and the sale of an equal number of May
3 puts for $0.50. Volume exceeded the previous open interest at
each strike, indicating that new positions were initiated.
This spread is unusual because BIOD closed Friday unchanged at
$2.65, leaving those puts
in the money
. It also turns some heads because the strategy uses different
expiration months, but it makes sense considering the timing.
BIOD has enrolled patients in a Phase II study of its BIOD-123
compound for the treatment of diabetes and expects results by the
end of the third quarter.
the September calls will provide exposure to a rally if the data is
The trader paid for the contacts by selling the May 3 puts,
resulting in no net cost. But because of these
, he or she also faces the possibility of being forced to buy
shares if they remain below $3 on May expiration six weeks from
now. (See our
Total option volume in Biodel was 14 times greater than average in
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
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