Short-Term Bulls Board the Intrexon Corp (XON) Bandwagon

Intrexon Corp call buyers expect a move north of $25

by

Published on Nov 11, 2014 at 2:17 PM
Updated on Apr 20, 2015 at 5:09 PM

Ahead of Intrexon Corp's (NYSE:XON) Thursday afternoon earnings report, shares of the biotech firm have charged 8.3% higher to perch at $23.40. Fueling the rally are positive comments from Herb Greenberg on CNBC. Not surprisingly, traders are piling into XON's options pits, where call volume is running at 13 times what's expected at this point in the session.

Digging deeper, the equity's 30-day at-the-money implied volatility has spiked 25.1% to 20.3%, signaling elevated demand for short-term strikes. Most active is XON's November 25 call, where roughly 1,100 calls are on the tape. The majority have traded at the ask price, and just 16 contracts exist here, making it safe to assume new bullish bets are being initiated.

Long story short, today's traders anticipate Intrexon Corp (NYSE:XON) will topple the quarter-century mark by the close on Friday, Nov. 21, when front-month options expire. The shares topped out at this level earlier, but haven't closed above it since July 11. As such, delta on the call is 0.33, signifying a 1-in-3 chance the option will be in the money at expiration.


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