Organovo Holdings 3-D Kidney Data a Boon to Option Bulls

Organovo Holdings Inc (ONVO) is soaring on 3-D kidney data

Apr 1, 2015 at 9:39 AM
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Organovo Holdings Inc (NYSEMKT:ONVO) is surging this morning, after the firm gave a presentation on the fully cellular 3-D bioprinted kidney tissue it's developed -- an industry first -- at the 2015 Experimental Biology Conference. Specifically, the shares are up more than 10% out of the gate to trade at $3.90 -- though they remain 46% lower year-to-date. Today's upward gap may be music to the ears of recent options traders.

During the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open more than 10 ONVO calls for every put. The resultant 10-day call/put volume ratio of 10.11 outranks 65% of comparable readings from the past year, indicating calls have been bought to open over puts at an accelerated clip in recent weeks.

However, it's worth noting that nearly 23% of Organovo Holdings Inc's (NYSEMKT:ONVO) float is dedicated to short interest. This amounts to roughly two weeks of trading, at the biotech stock's typical daily levels. Therefore, it's possible some of the calls (especially at out-of-the-money strikes) were bought to open by short sellers to hedge against an unexpected rally -- like the one we're seeing today.

 

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