Presenting For The SEC's Enforcement Pleasure: $21 Million In Medivation Insider Trading Profits

Medivation shares are not doing too hot: apparently if your core Alzheimer's drug (developed in collaboration with Pfizer) ends up being a failure, your stock drops by almost 70%.

Pity, because that drug may have been useful to everyone else buying the broader stock market with the hope they won't eventually suffer the same fate. Yet what is notable is that this information, which hit Business Wire at 7:30 am Eastern, was apparently good enough for someone to make a huge bet on a stock plunge just before the market closed yesterday, at 3:59pm to be specific, and to make almost $21 million on inside information.

Below, you can see the actual trades in MDVN April $40 puts, which amounted to nearly 16,000 in three unique trade blocks of 500, 4750 and 9850, just before the bell rang, at a price of $14/put.

Here is how the volume of this particular put has looked recently.

This class of puts now trades at about $27, meaning a profit of $13 per share, also meaning a total profit of 16,000*$13*100, or about $21 million.

SEC, take it away. Oh wait, we forget that most of your staffers are engaged in not policing this kind of behaviour, but looking at transvestite pornography. Oh well, we tried.

With kind gratitude to @Olivertse who first noticed this now perfectly acceptable market behavior.