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Bears take a dose of Warner Chilcott

Warner Chilcott has been falling for the last two weeks, and the bears are looking for more.

optionMONSTER's Depth Charge tracking system detected the purchase of 4,000 August 20 puts for $1.05 and the sale of 3,435 August 23 puts for $3.20 and $3.30. Volume was below open interest in the higher strike, which suggests than an existing position was rolled down to the lower contracts.

The trader collected a credit of about $696,000 and will profit further if the Irish drug maker continues to fall. The next big event that could potentially affect the shares is the release of second-quarter results before the bell on Friday.

WCRX is down 1.51 percent to $19.55 in midday trading. The stock has lost 20 percent of its value in the last month, with most of those declines coming after a July 25 announcement that its Lo Loestrin Fe oral contraceptive faces a generic threat from an Indian company.

Overall option volume in WCRX is 11 times greater than average so far today, with puts outnumbering calls by 186 to 1.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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