Pot Stock Burns Shorts After German Cultivation License

Aphria has been granted a cannabis cultivation license in Germany

Managing Editor
Apr 5, 2019 at 9:58 AM
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Pot stock Aphria Inc (NYSE:APHA) was granted provisional approval in Germany for a cannabis cultivation license, with a minimum annual capacity of 200 kilograms. This comes a few days after Aphria launched its first CBD-based product in Germany. The news has Aphria stock up 1% to trade at $10.03 this morning. 

Since February, Aphria stock has traded in a tight range, churning between the $10.50 and $9 levels. Year-to-date, APHA boasts a 77.5% lead, and going back even further, has now nearly tripled off its Dec. 6 low of $3.75. 

A short squeeze could be fueling the security's climb. Short interest fell 2% in the two most recent reporting periods to 17.37 million shares. However, this still represents a healthy 7.5% of APHA's total available float, and four times the average daily trading volume.

In the options pits, long calls have been popular. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows speculative players have bought to open 4,592 calls in the last 10 sessions, compared to 585 puts. Plus, call open interest of 68,294 sits in the 96th percentile of its annual range.

Drilling down, the July 10 strike is home to peak call open interest of 6,759 contracts. Data from the major options exchanges confirms significant buy-to-open activity here, meaning call buyers expect APHA to extend is run above $10 into July.

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