Option Traders, Analysts on the Right Side of AERI

Aerie Pharmaceuticals Inc (NASDAQ:AERI) hit its highest perch on record earlier

Apr 13, 2015 at 2:05 PM
facebook twitter linkedin

A number of drugmakers are having big days, including Aerie Pharmaceuticals Inc (NASDAQ:AERI). The stock topped out at record peak of $35.56 earlier, as buyers rush in ahead of the firm's expected release of Phase III drug data for its glaucoma treatment -- a theory echoed by one analyst at Stifel Nicolaus. Additionally, RBC Capital Markets waxed optimistic that the company could be a potential takeover target down the road. At last check, the shares were up 6.5% at $34.41, most likely music to the ears of option traders.

In fact, over the course of the past 10 sessions, speculators at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 9.33 calls for every put. Echoing this call-skewed bias is AERI's front-month gamma-weighted Schaeffer's put/call open interest ratio (SOIR) of 0.82, which indicates near-the-money call open interest outweighs put open interest among options expiring at this Friday's close.

Those purchasing the equity's near-term options are currently willing to pay a pretty penny. Specifically, AERI's Schaeffer's Volatility Index (SVI) of 132% rests higher than all other readings taken in the past year. Simply stated, premium on the security's short-term options is pricing in relatively inflated volatility levels.

Outside of the options pits, sentiment is fairly optimistic. All three analysts covering the shares maintain a "strong buy" recommendation, while the average 12-month price target of $41.33 stands in territory yet to be charted. This glass-half-full approach around the Street shouldn't be too surprising, though, given Aerie Pharmaceuticals Inc's (NASDAQ:AERI) long-term technical backdrop. Over the past 52 weeks, the equity has roughly doubled in value.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 


300x250 - Banner 3 - v1