Puma Biotechnology, Inc. (PBYI) Sell-Off Rewards Option Skeptics

Puma Biotechnology Inc (NYSE:PBYI) is reeling today, possibly on concerns about its cancer drug's side effects

Jun 1, 2015 at 2:59 PM
facebook twitter linkedin


Skepticism has been running high in Puma Biotechnology Inc's (NYSE:PBYI) options pits for some time. The drugmaker's 10-day put/call volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 3.07 -- with long puts more than tripling calls. What's more, this ratio is perched just 8 percentage points from a 12-month high.

Echoing this skepticism is PBYI's Schaeffer's put/call open interest ratio (SOIR) of 1.80. Not only does this SOIR indicate short-term put open interest nearly doubles call open interest, it also sits in the 90th percentile of its annual range.

These bearish bettors are in luck today, as PBYI's taken a 10% tumble to trade at $175.64 -- and landed on the short-sale restricted list. The shares were also temporarily halted earlier. Potentially pressuring the stock was news that nearly 40% of patients treated with PBYI's breast cancer drug neratinib developed severe diarrhea.

This isn't the first time the cancer treatment has weighed on the shares. PBYI gapped sharply lower on May 14 following the results of another neratinib trial. With today's losses, though, Puma Biotechnology Inc (NYSE:PBYI) is now sitting 7.2% below its year-to-date breakeven mark. Off the charts, the company will hold its investor/analyst meeting this evening.
 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners