2 Well-Priced Stocks Staging Big Swings Today

PLCE and SAGE's price action is attracting options traders

Deputy Editor
Apr 17, 2024 at 3:11 PM
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Depending on who you ask, a recession is either right around the corner or the stock market is ready to rattle off a seismic bull run. As always, the answer is likely somewhere in the middle of those two extremes. But due to the uncertainty surrounding the Federal Reserve’s rate cuts, traders are stuck in a holding pattern until more data defines the country's fiscal path.

Since bargains become popular when times are uncertain, we’d like to introduce a new weekly segment: Cheap Seats. Every week, we will profile two stocks under $20 with a market capitalization of at least $2 billion.

These are not outright "buy" recommendations, but interesting names – with cheap overhead – that are worth adding to your watch list. This week, we're taking a look at retailer Children's Place Inc (NASDAQ:PLCE) and biotech name Sage Therapeutics Inc (NASDAQ:SAGE)

Children's Place today announced a new loan deal with majority shareholder Mithaq Capital. The $90 million loan will be used to repay an existing $50 million loan under a restated agreement, and is part of the $168.6 million in funding it has has been getting since February. At last glance, PLCE was up 17.6% at $8.36, gapping away from last session's record low of $6.98. Since the start of the year, the equity is down roughly 64%. 

This announcement comes ahead of retailer's latest earnings report, due out before the open tomorrow. Options traders are ramping up activity ahead of the event, as PLCE's options pits have seen eight times the average daily options volume so far today. Puts are outweighing calls, with the most activity at the April 7.50 put, where new positions are being bought to open. 

Sage Therapeutics stock, on the other hand, is down 19.9% at $12.52 at last glance, trading at record lows after the company's Parkinson's treatment failed in a mid-stage trial. On the short sell restricted (SSR) list amid the volatility, SAGE is down 41.5% in 2024. 

Options bulls appear to be betting on a bounce, however, as SAGE calls are running at six times the intraday average volume. Most popular is the May 17.50 call, followed by the January 2025 37.50-strike call, with new positions opening at the latter. 

 

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