Stocks On the Move: Cubist, Digital River, Liquidity Services

CBST, DRIV, and LQDT are moving sharply in Monday's trading

Digital Content Group
Dec 8, 2014 at 11:47 AM
facebook twitter linkedin

Around midday, three of the top market movers are drugmaker Cubist Pharmaceuticals Inc (NASDAQ:CBST), cloud-commerce concern Digital River, Inc. (NASDAQ:DRIV), and online auctioneer Liquidity Services, Inc. (NASDAQ:LQDT). Here's a quick roundup of how CBST, DRIV, and LQDT are performing on the charts so far.

  • CBST has rallied more than 35% today to hover near $100.68 -- and earlier touched a record high of $101.03 -- after Merck & Co., Inc. (NYSE:MRK) agreed to buy the smaller pharmaceutical issue for $102 per share. Longer term, the shares are now staring at a year-to-date lead of roughly 46%, and exploring triple digits for the first time ever. This is bad news for at least one group on Wall Street -- namely, short sellers. About 6% of Cubist Pharmaceuticals Inc's float is dedicated to short interest, which would take 9.1 sessions to buy back, at the stock's typical daily trading volume.

  • DRIV has plummeted 25.2% so far to waffle around $19.09, nearly wiping out its year-to-date gains. Sparking the sell-off was news that the company extended the deadline related to a digital distribution agreement with Microsoft Corporation (NASDAQ:MSFT). Ahead of these developments, option traders had been upping the bullish ante on Digital River, Inc. The stock's 50-day call/put volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) checks in at 21.58 -- meaning nearly 22 calls have been bought to open for every put during the last few months. What's more, this ratio is higher than 81% of similar readings from the past year, suggesting traders have bought to open calls over puts at a faster-than-usual clip of late.

  • LQDT earlier hit a five-year low of $7.51, and was last seen 24.4% lower at $7.76, after Wal-Mart Stores, Inc. (NYSE:WMT) terminated its deal with the Internet firm -- which LQDT "is contesting," according to a filing with the Securities and Exchange Commission. Also weighing on Liquidity Services, Inc. are price-target cuts to $9 from $12 at Baird -- which reiterated its "neutral" rating -- and to $9 from $11 at BofA-Merrill Lynch, which underscored its "underperform" opinion. This is likely music to the ears of recent options traders. LQDT's 10-day ISE/CBOE/PHLX put/call volume ratio of 8.21 stands higher than 79% of similar readings taken in the last year, hinting at a healthier-than-usual appetite for bearish bets over bullish among speculators.

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Best stocks for October and worst stocks for October


Special Offers from Schaeffer's Trading Partners