Unusual Options Activity in Illumina $ILMN

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Unusual Options Activity in Illumina ILMN
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• Hi, My name is Steve and Im with Options Trading
  Research, today were reviewing our recently
  published article

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• Unusual Options Activity In Illumina ILMN

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• As many of you know, unusual options activity can
  be a valuable indicator as to what traders are
  thinking, and more importantly, where these
  stocks are heading in the short-term.

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• This is something professional options traders
  pay a lot of attention to, and for good reason
  Unusual options activity can tip off big moves
  in a stock, either up or down.

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• So lets take a look at some interesting
  activity that caught our eye this week
• Illumina ILMN is a biotech company specializing
  in genetic analysis.

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• The company has a market cap of over 23 billion
  on sales of around 2 billion per year. For a
  good description of the company, follow the l
  ILMN is trading at 144.93, down 12 for the
  year.

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• Thats 40 below the 52-week high, and right at
  the 52-week low. ink.

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• So what does unusual options activity in ILMN
  tell us?

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• As of this writing, ILMN is down big. It opened
  down 18 and is currently down 11 after gaining
  back some ground. Essentially, the decline is
  based on disappointing preliminary revenues for
  the third quarter.

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• More specifically, management lowered revenue
  growth expectations from 20 for the year to 18
  overall. Lower than expected sales in Europe and
  Asia are one the reasons why the company moved
  projections lower.

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• Heres the dealThis week, a trader sold a huge
  block of ILMN October puts. Keep in mind, a put
  option makes money when the underlying stock or
  stock goes down.

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• As such, selling puts would make money if the
  stock increases, or stays above the short put
  strike.

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• Specifically, a trader sold 12,700 125 calls
  expiring on October 16th.The total cash collected
  for this trade is roughly 2.3 million or 1.80
  per option, which is the max gain for the trade.

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• The trade breaks even at 123.20. Heres the
  chart of ILMN

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• ILMN has clearly gotten crushed over the last
  month, with todays 11 the icing on the cake.
  The stock is trading well below the 50-day moving
  average. It doesnt help that the
  healthcare/biotech sector has also been hit hard
  in recent weeks.

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• This trade is suggesting that despite the huge
  decline, ILMN has a definite floor. The short
  put strike is 125, which is still a good 20
  away from the current price.

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• The share price would have to decline by over 14
  by the end of next week for the trade to lose
  money.

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• Most likely, the put seller sees the huge premium
  available at an OTM strike and is taking
  advantage of it. After all, the news isnt
  nearly as bad as the selling makes it seem.

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• Being able to capture 1.80 premium on a strike
  thats 20 out of the money, with less than two
  weeks to expiration well, lets just say I
  certainly see why the trade was made.

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• More Options Trading Ideas

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• Keep in mind, theres a lot more unusual options
  activity going on than what we discuss here. We
  just try to bring you what we feel are the most
  significant ones and the ones you might actually
  be able to make some money on!

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