Intrexon Stock On Fire After Joining Cannabis Craze

Intrexon has announced advancements in developing medical cannabinoids

Managing Editor
Sep 24, 2018 at 10:12 AM
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Pot stocks such as Tilray (TLRY) are the latest flavor of the week on Wall Street. It seems the cannabis craze has reached drugmakers now, too, with Intrexon Corp (NYSE:XON) announcing the development of a low-cost yeast strain of cannabinoids for medical purposes. In response, XON stock is up 20% to trade at $17.38 this morning, the best stock on the New York Stock Exchange (NYSE) so far. 

Even prior to today's surge, Intrexon stock was up 26% in 2018. Now, the biotech name is heading towards its best day since March 2. Plus, XON's surge today has the shares on track to close above their 320-day moving average for the first time since an early May bear gap following a poorly received earnings report. 

The stock is heavily shorted, too, which could be helping today's price action as these bearish bettors rush to cover. Short interest increased by 3% in the most recent reporting period to a record high 32.61 million shares. This represents a whopping 47.4% of XON's total available float, and 45 times the average daily trading volume. 

Options traders appear to have a strong appetite for calls, despite limited absolute volume. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), XON's 50-day call/put volume ratio of 9.84 ranks 1 percentage point from an annual high. Given the amount of short interest tied up with the security, it's possible some of the call buying could be attributable to shorts seeking an options hedge. 

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