By Chris McKhann
Shares of Cell Therapeutics don't have far to fall as they are already well under $1, but it appears that traders are still making that bet.
The biopharmaceutical company is up 14% percent on the day, to $0.79. CTIC has been trading below $1 since the beginning of February, trending down since hitting at 52-week high of $2.23 back in June.
The heaviest option volume today is in the June 1.50 puts. More than 8,500 contracts have traded at that strike, the vast majority of them apparently bought. The biggest block of 5,000 was purchased for $1.05 against open interest of 197 contracts.
This put action is very odd. Traders are paying $1.05 with the potential to make $0.45 only if CTIC is worth nothing by June. Given that there is substantial open interest at the $1 strike, with more than 20,000 contracts in June $1 puts, this could be a hedge against existing option positions.
(Chart courtesy of tradeMONSTER)