Trade bets against Medivation bounce

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Medivation collapsed in March after an Alzheimer's medicine failed in a late-stage trial, and one investor is abandoning hopes of a rebound.

MDVN Chart optionMONSTER's tracking systems detected the sale of 16,000 June 6 calls for $5.50 against no existing open interest. The trade pushed option volume in the small-cap drug developer to 14 times greater than average.

MDVN rose 4.57 percent to $11.66 in morning trading. The stock is down 71 percent since March 3, when the company and partner Pfizer said that Dimebon failed to improve the mental abilities of Alzheimer's patients. MDVN had rallied about 60 percent in the four months before the news.

Today's calls were probably sold by a shareholder locking in an exit price on the stock. The transaction reflects a belief MDVN has little hope of rallying, even though it has been bottoming out over the last two months and some analysts think that Dimebon could still be approved for some uses.

(Chart courtesy of tradeMONSTER)



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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This article appears in: Investing , Options

Referenced Stocks: MDVN , PFE

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