Buying ILMN put contracts.

Illumina Inc. (ILMN) is a biotech company specializing in genome sequencing.

The stock has been extremely weak alongside a drop for most biotech stocks. But even after it’s drop, ILMN still trades for about 85 times expected earnings — a very rich valuation.

Momentum is decidedly negative and a recent rebound from oversold levels gives us a good entry point for a new bearish position.

Buying March $380 put contracts gives us time for the trade to evolve. We’ll also get the benefit of close to a $1 for $1 option price movement if the stock drops, while muting potential risk through added time value if the stock rises.

• Buy (to open) 3 ILMN March 18th $380 Puts
• Limit $39.00 or less
• The new position will represent roughly 10.0% of our Spec Model capital
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• 11:20 Executed
• Bot 3 ILMN March 18th $380 Puts @ $38.00