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