Theravance exploded higher last week, and one trader is
collaring the name.
optionMONSTER's Depth Charge monitoring program detected the
purchase of 2,000 January 20 puts for $1.35 and the sale of an
equal number of January 30 calls for $0.50, resulting in a cost of
Known as a
, the strategy is commonly used by investors who own a stock and
want to protect against a potential drop. In the case of today's
transaction, the trader has essentially agreed to accept a maximum
selling price of $30 on the shares while locking in protection at
Given the premium expended, that translates into $29.50 on the
upside and $19.50 on the downside. (See our
THRX is trading 2.26 percent higher to $23.96 this afternoon, up
from about $20 last Monday. The drug developer has spent most of
the last year fluctuating sharply between about $16 and $28.
The collar trade pushed total options in the name to 15 times
greater than average so far today, according to the Depth
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