Biotech Stock Surges on Mid-Stage Drug Trial Success

ETNB options volume is running at 17 times the intraday average

Digital Content Manager
Mar 22, 2023 at 10:49 AM
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The shares of 89bio Inc (NASDAQ:ETNB) are up 38.2% to trade at $15.11 at last check, after the biotech name revealed its experimental drug pegozafermin to treat nonalcoholic steatohepatitis (NASH) -- a type of fatty liver disease -- met the main objectives of a mid-stage study. 

The stock earlier hit a one-year high of $15.78, blasting through resistance at the $14.50 level that had been in place since early February. The 120-day moving average contained yesterday's pullback, helping ETNB to a now 262.1% year-over-year lead.

Overall options volume is today running at 17 times the intraday average, with 6,745 calls and 5,174 puts traded so far. Most popular is the April 15 call, followed by the 7.50 put in that standard series. 

Short-term options traders have been more put-biased than usual. This is per 89bio stock's Schaeffer's put/call open interest ratio (SOIR) that ranks in the 86th percentile of its annual readings.

ETNB looks ripe for a short squeeze, too. Short interest increased by 10.8% over the last reporting period, and the 5.15 million share sold short make up 10.3% of ETNB's available float, or nearly one week's worth of pent-up buying power, at the stock's average pace of trading.

 

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