Limited Risk Trade in AMAG

Biopharmaceutical company AMAG Pharmaceuticals (NASDAQ: AMAG) is selling off by nearly 7.00% this morning following a lackluster earnings report from the company. The company reported a net loss of $1.07 per share on $13.1 million in revenue.

The company is receiving a large, limited risk trade this morning in the April contract cycle. The April $37.50/45 call spread was sold for a $1.50 credit 2,000 times on open interest of 50 contracts. This credit spread is designed in hope that AMAG Pharmaceuticals will remain lower than $37.50 at April expiration, where the trader will keep the full $1.50. The max loss on this spread is $6.00, which is the difference between the strike prices minus the net credit taken in