NBEV has lost more than half its value since April
One of the best stocks on the Nasdaq this morning is New Age Beverages Corp (NASDAQ:NBEV), up 12.4% to trade at $3.13, on track for its best single-session gain since April 9. This is after Japan's Narcotics Control Division and the Ministry of Health approved the company's cannabidiol (CBD) products, allowing New Age's CBD-infused items to be sold immediately.
When we last checked in with the CBD-infused drink maker, the stock was riding high amid its global rollout in April. It's been a dramatic reversal since then though, with NBEV shedding more than half its value and stumbling to an annual low of $2.73 yesterday. Even today's rally -- that could help snap a six-day losing streak -- takes the shares right up to their descending 30-day moving average, a trendline not conquered on a closing basis since late May.
In the options pits though, calls are all the rage. Data from the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows speculative players have bought to open 4,184 calls in the last 10 sessions, compared to just 466 puts.
However, short interest increased by 13.8% in the most recent reporting period, and now accounts for a whopping 56% of NBEV's total available float. What this means is that some of the call buying could be shorts seeking an options hedge against any upside risk.
Whatever the motive, short-term premiums look attractive on New Age Beverage options at the moment. This is per the equity's Schaeffer's Volatility Index (SVI) of 79%, which ranks in the 9th percentile of its annual range. In other terms, short-term options are relatively cheap, from a volatility perspective.