B. Riley FBR waxed optimistic on the firm's leukemia drugs
The shares of penny stock Aptose Biosciences Inc (NASDAQ:APTO) are higher today, after B. Riley FBR initiated coverage with a "buy" rating. What's more, the analyst issued a $5 price target -- more than double APTO stock's current price -- and waxed optimistic on the company's "two unique first-in-class" leukemia drugs. As such, Aptose Biosciences stock was last seen 5.6% higher to trade at $2.17.
APTO stock notched a three-year high of $4.55 on June 18, but has since surrendered more than half its value. Recent rebound attempts have stalled in the face of the formerly supportive 50-day moving average, and the shares are also still staring up at their year-to-date breakeven of $2.24 -- the site of today's intraday peak, in fact.
While absolute options volume tends to run light on Aptose -- the drugmaker has seen just five calls and zero puts bought to open in the past five days on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) -- calls have definitively been the option of choice among APTO speculators. In fact, looking at open interest data, the January 2019 and April 2.50 calls are most populated, with 375 and 359 contracts, outstanding, respectively. On the flip side, the most populated put strike is the April 2.50 put, with just 10 contracts open.
However, that call bias could be due to APTO stock's current price. The penny stock has little downside wiggle room at current levels, so the profit potential from buying a put is much more limited compared to the profit potential of a long call.