WWE, RKDA, CARA Stocks Soaring In Early Trading

Options activity had been bullish on WWE stock

Jun 27, 2018 at 9:27 AM
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While the broader U.S. stock market keeps trying to claw back the losses from Monday's massive sell-off, shares of World Wrestling Entertainment, Inc. (NYSE:WWE), Arcadia Biosciences Inc (NASDAQ:RKDA), and Cara Therapeutics Inc (NASDAQ:CARA) are exploding higher this morning. We'll take a closer look at why the stocks are rallying below.

WWE Stock Climbs Again On TV Deals

WWE stock is set to open up 10%, which would put it in record-high territory, thanks to the company's new TV deals with USA Network and Fox Sports that will substantially increase revenue in the coming years. Rumblings of the new Fox deal had the shares surging higher a month ago, ultimately hitting an all-time peak of $68.25 a week ago, and closing yesterday at $66.62. Year-to-date, World Wrestling Entertainment has added 118% -- and, of course, that's not considering today's expected jump.

This extended upside would seemingly be good news for recent options traders across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), who've almost exclusively targeted long calls. By the numbers, more than 3,800 calls were bought to open during the past 10 days at these exchanges, compared to fewer than 250 puts.

RKDA Shares Pop On FBN Agreement

Shares of Arcadia Biosciences are about to jump 21% when the opening bell rings, thanks to a new partnership with the Farmer's Business Network (FBN). The agreement is intended to help expand Arcadia's GoodWheat program. RKDA stock got a brief boost last week thanks to a fresh analyst "buy" recommendation, though the equity has since extended its longer-term slide. For reference, the security has struggled to hold upside momentum since exploding to $66.65 in mid-March. The stock closed yesterday's session at $7.81.

Drug Trial Results Put CARA Stock In Focus

The last time we checked in on CARA stock a little over a month ago, the shares were gapping higher. It's a similar setup this morning, as the security is set to jump 30% due to positive trials results for its pain treatment, CR845, in patients undergoing abdominal surgery. If the pre-market gains come to fruition, Cara Therapeutics would be trading at its highest point since last June, after closing Tuesday at $16.44. Before the bull gap last month, it had mostly spent the last year in a tight sideways pattern.

This strong price action is something analysts had been expecting out of CARA, since all five in coverage have "strong buy" ratings. Plus, the average 12-month price target is $24. On the other hand, roughly one-quarter of the stock's float is sold short.

 


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