Merck Stock Eyes Sixth Straight Weekly Win on Heels of FDA Approval

Merck stock is showing a larger-than-usual put-skew among options traders

Managing Editor
Dec 20, 2019 at 11:48 AM
facebook twitter linkedin


Pharmaceutical name Merck & Co., Inc. (NYSE:MRK) is up 1.4% to trade at $91.30 this morning, just off a roughly 20-year high of $92.64 and pennies from the record peak from 2000, on the heels of a drug approval from the Food and Drug Administration (FDA). Specifically, the FDA passed Merck's vaccine Ervebo, a preventative drug for the deadly virus Ebola. 

Over the past 12 months, MRK added 24%, with a layer of support stemming from the 20-day moving average for a majority of 2019. Now back trading in record-high territory, Merck stock is eyeing its third straight daily gain, and sixth straight weekly win.

Daily MRK with 20MA

Digging deeper, the stock's Schaeffer's put/call open interest ratio (SOIR) comes in at 1.23, and ranks in the 98th percentile of its annual range. In simpler terms, this shows a larger-than-usual put-skew among options traders.

Lastly, short-term options premiums on Merck stock look relatively cheap at the moment, based on the equity's Schaeffer’s Volatility Index (SVI) of 15%. This ratio ranks in the 12th percentile of its annual range, meaning those looking to speculate on MRK with options, should do so now.

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners