Options Traders Pile on Biogen Stock Following FDA Update

The equity has added nearly 20% already in 2021

Assistant Editor
Jan 29, 2021 at 10:24 AM
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Biopharmaceutical concern Biogen Inc (NASDAQ:BIIB) is up 7.9% to trade at $291.00 this morning, after the Food and Drug Administration (FDA) extended the review period for Biogen's experimental Alzheimer's disease treatment aducanumab. The review period will be extended by three months, a move that shows the application for approval is being carefully considered.

Today's positive price action has resulted in a bull gap on the charts, launching the equity above the $285 level for the first time since Nov. 4 -- the day that the FDA announced aducanumab had substantial evidence to back its approval. Furthermore, today's rise has BIIB breaking above its 320-day moving average, which acted as resistance for much of the last four months, and the security is up 19.8% in 2021.

Meanwhile, the options pits are flashing a preference for calls over the last 10 weeks. BIIB sports a 50-day call/put volume ratio of 1.73 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 85th percentile of readings from the past 12 months. Echoing this, Biogen stock's Schaeffer's put/call open interest ratio (SOIR) sits higher than just 3% of readings in its annual range, suggesting short-term option players have rarely been more call-biased during the past year. 

Today's options pits show ample activity occurring on both sides of the fence. Already, 7,055 calls and 3,677 puts have exchanged hands -- 10 times the volume that's usually traded at this point. The most popular is the March 300 call, followed by the 275 put from the same series, with new positions opening at the latter.

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