Pharmaceutical Stock Jumps on FDA Approval

The options pits have been much more pessimistic than usual, except for today

Deputy Editor
Sep 12, 2022 at 10:23 AM
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Bristol-Meyers Squibb Co (NYSE:BMY) is up 6.4% at $74.62 at last glance and earlier traded as high as $75.99, after the U.S. Food and Drug Administration (FDA) approved Sotyktu, the company's oral treatment for plaque psoriasis. After the update, BMO raised its price target to $94 from $92. 

BMY is heading for its fifth straight win, and best single-session gain since November 2020. However, today's pop has run out of steam at the shares' 100-day moving average, a trendline that's been cleared on a closing basis just once since June. Year-to-date, the equity is now up 20.3%.

The options pits have been unusually bearish as of late. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), BMY sports a 50-day put/call volume ratio of 1.12, which stands higher than 99% of readings from the past year. Similarly, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.18 ranks in the top percentile of its 12-month range, showing a clear preference for puts among short-term options traders. 

Today, calls rule the roost. In just the first hour of trading, 21,000 calls have crossed the tape, volume that's four times the average intraday amount. The September 75 call is the most popular, which expires at the end of this week. 


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