Credit: Shutterstock photoOpko Health is falling on a plan to dilute shareholders, and one investor apparently thinks that it will remain depressed for most of the year.
optionMONSTER's tracking systems detected the sale of 5,000 September 5 calls for $0.35 and $0.40 against open interest of just 167 contracts. The trade pushed total options volume in the former high-flying drug developer to 42 times greater than average.
OPK plunged 9.13 percent to $4.18 in morning trading after announcing it would sell $100 of stock.
It has more than doubled since September, fueled by rapid revenue growth, acquisitions, and collaborations with larger companies. The rally has brought the shares back near a price area where they peaked in 2007.
Some chart watchers may expect resistance to around this level, which explains why management and its investment banks decided to raise capital now.
The call seller is positioning for OPK to remain trapped below $5 though September. The transaction may have been the work of a shareholder looking to earn income from a position that they expect to lag for several months into the future. (See our Education section)
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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.