Jefferies Calls Bottom on Gene Therapy Stock After Huge Sell-Off

AXGT has sold off massively in the past 12 months

Jun 12, 2019 at 10:30 AM
facebook twitter linkedin


Axovant Sciences Ltd (NASDAQ:AXGT) has seen its stock fall from the mid-$30 range to yesterday's close of $3.94, even after positive data for its Parkinson's treatment. However, Jefferies referred to the shares as "remarkably cheap" and even though it cut its price target to $16 from $24, it kept its "buy" rating in place, obviously expecting huge upside for the gene therapy specialist.

This follows the company's earnings release last night, where it reported a loss of 45 cents, compared to expectations for a larger loss of $1.70. Despite this, the shares are trading lower again today, down 1% at $3.90.

Some options traders have been speculating on an upside move, with the June 6 and 7 calls seeing heavy trading in the past 10 days. In Tuesday's trading, the July 4 call was popular. Overall, 349 calls were bought to open during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), compared to 26 puts.

Meanwhile, short interest fell by 88% in the last two reporting periods, but 10% of the float remains dedicated to short interest. Going by average daily trading volumes, this accounts for 3.2 days' worth of buying power.

 

 

 

These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!

 

Common mistakes options traders make
 


 


 
Special Offers from Schaeffer's Trading Partners