Shares of Pharmacyclics (PCYC) are dropping this morning after the company reported Q1 adjusted earnings of $1.06 per share on revenues of $102.7 million; EPS missed the Street?s estimate by a penny, while revenues came in $3m above expectations.
PCYC is off 10.74%, trading at $51.21.
Traders seems to be embracing the stock?s slide and are selling downside puts. Overall put volume is running at 10x normal volume with 8,523 contracts traded. The majority of the action has been put sales.
The January 2013 $33 put was sold 2,500 times, near the bid, for $0.65 (spread: $0.60/1.20) on open interest of only 1 contract. Puts were also active in November with the $44 strike sold 1,956 times, near the bid, for $0.55 (spread: $0.50/0.80), and the $45 strike sold 1,000 times, near the bid, for $0.43 (spread: $0.40/0.95). Volume exceeded open interest on both Nov strikes.
30-day implied volatility is popping 5.6% today to 75.88%, while 10-day realized vol is registering 54.16%.
Pharmacyclics, Inc. is a clinical-stage biopharmaceutical company focused on developing and commercializing small-molecule drugs for the treatment of cancer and immune mediated diseases.?