Dendreon Options Spike (DNDN)

Posted in Options 
July 31st, 2008

Dendreon Corp. (NASDAQ: DNDN) is seeing a flurry of stock options activity today yet the stock is not reflecting the volume at all.  We have seen more than 20,000 shares in both PUTS and CALLS in November 2008.  Oddly enough, this is actually before most traders expect big news from PROVENGE.

Option/Strike                 Volume    OpInt
NOV08 $12.50 CALLS    20,136    5,837
NOVo8 $2.50 PUTS        20,505    2,413

This is representative of 2 million shares on a fully leveraged basis.  This is usually deemed a risk reversal trade, but many using lay terms may call it a synthetic or artificial straddle.  Share are up 3% today, but we have only seen 1.2 million shares trade hands.

After looking around there is actually some data coming out as soon as October, but the biggest data is still out into next year.

Jon C. Ogg
July 31, 2008

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