Traders are betting on a rebound in GlaxoSmithKline, which has yet to recover from last month's losses.
optionMONSTER's Heat Seeker system detected the purchase of 2,500 January 44 calls for $0.85 and the sale of 2,500 January 36 puts for $0.90. This is new positioning, as volume was above open interest in both strikes.
This combination trade produced a credit of $0.05 and is highly bullish because a rally would boost the price of the long calls while decreasing the value of the puts that were sold . But the opposite will occur if the stock drops, and the trader will be on the hook to buy shares if they fall below $ by expiration in . (See our Education section)
GSK is off 0.52 percent to $40.03 in midday trading and down 10 percent in the last month. The drug company hit a recent high of $45.49 in early August but fell near $39 at the depths of last month's market selloff and has been trading in an increasingly narrow range since.
With today's combination trade, total option volume in GSK is nearly triple its full-session average for the last month.
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