Put Spread Purchased in Salix Pharmaceuticals Ahead of FDA Decision/Q2 Earnings

Salix Pharmaceuticals

sees a bearish August 50-40 put spread purchased 2,000 times for a premium of $2.45. With the company waiting on a decision from the FDA this Friday on its constipation drug Relistor SC and second quarter earnings set to be released after the close on August 8th, today's put spread trade is either an investor looking for the shares to lose at least 5.7 percent of their value with one of the upcoming releases or a long equity holder looking to hedge against any downward movement in the shares. Today's spread has helped push total contract volume in SLXP to more than 60 times its daily average and creates the second largest open interest position in all of its listed options.