Option Bulls See a Short-Term Boost for GW Pharmaceuticals plc (GWPH)

Options bulls take on GW Pharmaceuticals PLC - ADR (GWPH)

by Digital Content Group

Published on Jan 8, 2015 at 11:46 AM
Updated on Jun 24, 2020 at 10:16 AM

After gapping lower out of the gate, GW Pharmaceuticals PLC - ADR (NASDAQ:GWPH) was last seen 3.6% above breakeven at $73.67. The company was one of several pharmaceutical names to release drug data this morning, and activity has picked up in its options pits as a result.

As was mentioned, the equity's drug data was initially frowned upon by investors, but sentiment has since changed course. For instance, calls are being traded at 11 times typical intraday levels, with the February 75 strike leading the way. It appears most of the contracts that have crossed at this strike were of the buy-to-open variety, meaning these traders expect GWPH to top the $75 mark before the close on Friday, Feb. 20, when the contracts expire.

Taking a step back, the stock hasn't closed above $75 since Dec. 3, and has underperformed the broader S&P 500 Index (SPX) by roughly 8 percentage points in the past three months. What's more, the equity is facing resistance at its descending 80-day moving average, which contained the stock's rally attempt a few weeks back.

Still, the analyst community has remained upbeat toward GW Pharmaceuticals PLC - ADR (NASDAQ:GWPH), as all three of the brokerage firms covering the equity rate it a "strong buy." Moreover, the stock's average 12-month price target of $390 comes in at over five times current trading levels.


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