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 X logo 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.


Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.

Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!