An image of a man holding out his hands with many different images
Markets

Onyx draws large downside position

ONYX Pharmaceuticals is stumbling, and one investor is bracing for a plunge.

optionMONSTER's Depth Charge tracking program detected the purchase of about 7,000 August 30 puts, most of which priced for $1.20. Roughly the same number of August 32 calls were sold at the same time for $0.70. Volume was more than 19 times open interest in both strikes.

The trade cost about $0.50 and will simulate a short position in the company, which jointly markets Nexavar as a treatment for kidney and liver cancer with Bayer. After the close, it reported earnings and revenue that missed analysts' forecasts.

ONXX fell 3.71 percent to $30.37 in the regular session and pushed slightly lower in extended trading. It's down 30 percent since mid-May.

Yesterday's option trade may have been the work of an investor looking to hedge a long position in the stock, in which case he or she would be forced to sell ONXX for $32 on a rebound to that level. They'd also be protected anywhere below $29.50. (See our Education section)

Overall option volume in the session was 12 times greater than average, according to the Depth Charge.

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

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


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

Other Topics

Options

Latest Markets Videos