Why Trader is Selling Puts in Spectrum

Spectrum Pharmaceuticals has been finding support around its current level, and one investor is confident it will hold.

optionMONSTER’s tracking programs detected the sale of more than 2,000 December 10 puts for $0.45. Open interest at the strike was 1,388 contracts when the session began, so new positions were clearly initiated.

The investor is now obligated to buy shares in the drug maker for $10 if they close below that level on expiration. If they remain above it, the puts will expire worthless and they’ll keep the credit as profit.

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