Upbeat Vascepa Expectations Boost Amarin Stock

Options traders have been eyeing the $20 level, too

Jul 2, 2019 at 9:37 AM
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Amarin Corporation plc (NASDAQ:AMRN) stock is trading up 6.8% at $20.55 this morning, after the cardiovascular disease specialist said it expects 2019 revenue to arrive between $380 million and $420 million -- up from the previous $350 million estimate -- on improved expectations for Vascepa, with a Food and Drug Administration (FDA) expected to vote on possible expansion of the heart drug's label by the end of this quarter.

Today's upside puts AMRN shares above short-term congestion in the round $20 region. The drug stock has gained 47% year-to-date, with its recent chop higher supported by its 180-day moving average.

Options traders have been targeting the $20 level, too, with the July 20 call one of AMRN's most heavily populated strikes. Data points to a mix of buying and selling here, with those purchasing the calls betting on a breakout above $20, while those writing the calls expecting the level to serve as a near-term ceiling.

It's certainly a more attractive time to buy premium on short-term Amarin options, versus sell it. The stock's Schaeffer's Volatility Index (SVI) of 56% ranks in the bottom percentile of its annual range, meaning front-month contracts are pricing in unusually low volatility expectations at the moment.


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