3 Surging Penny Stocks

Options traders are blasting AXON and VBLT

Jun 6, 2018 at 12:55 PM
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The stock market is ripping higher today, with the tech sector continuing to climb. Biotechs are on the rise, too with the SPDR S&P Biotech ETF (XBI) fresh off a record high. Among individual names to watch are penny stocks Axovant Sciences Ltd (NASDAQ:AXON), Cellectar Biosciences Inc (NASDAQ:CLRB), and Vascular Biogenics Ltd (NASDAQ:VBLT).

Axovant Sciences Stock Doubles on Licensing Deal

Axovant Sciences stock has surged 110.6% to trade at $3.69, on track for its best day ever, after the drug company entered into a licensing agreement with Oxford BioMedica to develop and distribute Parkinson's gene therapy treatments, AXO-Lenti-PD and ProSavin. However, the security remains well off its September highs near $28 -- a sell-off sparked by the company's failed Alzheimer's drug.

Options traders appear to bracing for a quick retreat. Roughly 9,700 puts and 6,800 calls have traded on AXON so far today -- 31 times the average daily pace. Most active is the July 3 put, where it looks like new positions are being purchased for a volume-weighted average price of $0.43, making breakeven at July options expiration $2.57 (strike less premium paid).

Cellectar Biosciences Rallies Into Familiar Resistance

The Food and Drug Administration (FDA) granted "rare pediatric disease" status to Cellectar Biosciences' treatment for rhabdomyosarcoma, a soft tissue cancer. As a result, CLRB stock has gapped 16.3% higher to trade at $1.07 -- headed for its first close north of its 120-day moving average since October. The shares are still down 22% year-to-date, though, and were rejected earlier by familiar resistance in the $1.25 region.

clrb stock daily chart june 6

Vascular Biogenics Options Volume Pops With Stock

Vascular Biogenics stock has jumped 21.3% to trade at $2.61, pacing toward its biggest one-day gain since September, after the company presented positive data for its MOSPD2 technology to treat cancer and inflammation. Nevertheless, VBLT stock is still down 63% year-to-date -- due in part to the company's failed brain cancer drug study -- and was earlier rejected near $2.90, home to its early March bear gap intraday high.

The surge has sparked a rush of activity in VBLT's options pits, though absolute volume is still relatively light. Regardless, 472 calls and 177 puts are on the tape, compared to an average daily amount of 20 total options. While the June 2.50 call is most active today, the June 10 call is home to peak open interest of 3,089 contracts. Trade-Alert indicates most of these deep out-of-the-money calls were bough to open in January, when Vascular Biogenics was trading near $7.75.

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