Posted on 23 July, 2014 by admin
OptionHacker flagged this trade in Puma Biotechnology, Inc (PBYI) last Tuesday that paid out in full late yesterday. A trader laid out a massive bet last week that Puma would be successful in its phase III clinical trial of Neratnib, an experimental breast cancer drug. The results were positive and the stock more than tripled in after-hours trading fromTuesday’s close of $59.03 to $217.10. This trader sold puts to finance a long call spread actually taking on a massive theoretical downside risk of $5,000,000 if the stock would have gone to zero. In doing so he laid out $50,000 dollars and made 4900% in a week. This trader made a net profit of nearly $2.5 million in just 7 days.
This is aggressively bullish activity as there was very little open interest in these contracts indicating this was an opening long position likely put on by an institutional investor that really played the catalyst event that was the trial, and it turned out to be an Absolute Blowout Winner!