St. Jude is trying to bounce, but the bears are coming down on
it like a ton of bricks.
optionMONSTER's Depth Charge tracking program detected the purchase
of about 7,000 January 42.50 puts for $7 against open interest of
about 5,686 contracts. The trade accounted for most of the trading
in STJ so far today.
Shares are down 1.21 percent to $36.69, having surrendered an
earlier push toward $38. They've lost 16 percent of their value in
the last month alone and have been dropping violently since early
The maker of heart devices has struggled as investors worry about
the future of its Quadrapole product. Management also cut guidance
the last time earnings came out on July 20. The next release is
scheduled for the morning of Oct. 19.
Today's options activity is unusual because it entails
contracts. This suggests that the investor is placing a speculative
bearish wager rather than
hedging a long position
in the name. (See our
Given how steadily STJ has been falling, it appears to be a
momentum trade looking for the downtrend to continue after a brief
rebound this week.
Overall option volume in the name is 12 times greater than average,
with puts outnumbering calls by 47 to 1.
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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