Biogen Stock Set for Best Day Since 2004 After Alzheimer's Breakthrough

BIIB options are flying off the shelves

Managing Editor
Jul 6, 2018 at 10:16 AM
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Biogen Inc (NASDAQ:BIIB) stock is up 20.7% to trade at $360.77, after the biotech's Alzheimer's drug succeeded a mid-stage trial after failing to meet the main study goal back in December. While analysts have yet to weigh in with upgrades and/or price-target hikes, Canaccord Genuity called the data a "pleasant surprise," and reiterated its "buy" rating on BIIB shares.

Biogen stock is on track for its best day and week since February 2004. The shares have now added 45% since their late-April bottom of $249.17, and have blasted past former resistance at their 200-day moving average. In fact, BIIB is now within striking distance of its Jan. 26 two-year high of $370.57.

In the options pits, put buying has been quite popular in the past 10 days. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHXL (PHLX), the stock's 10-day put/call volume ratio of 0.99 ranks in the elevated 88th annual percentile, meaning long puts have been initiated relative to calls at an accelerated clip.

Echoing this, BIIB stock's Schaeffer's put/call open interest ratio (SOIR) of 1.22 ranks in the 90th percentile of its annual range. In other words, traders are more put-heavy than usual among options set to expire in three months or less.

Today, however, both puts and calls are flying off the shelves. Biogen has already seen about 6,600 calls and 6,400 puts trade in the first hour of the session -- 15 times the norm, and pacing for an annual high. Digging deeper, traders are placing eleventh-hour bets at the weekly 7/6 355-strike call and 345- and 355-strike puts, which expire at today's close.

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