Regulus Therapeutics Inc. (RGLS) Bulls Bet On More Drug-Related Gains

Regulus Therapeutics Inc (RGLS) calls are trading at almost nine times the average intraday pace

by Karee Venema

Published on Jan 8, 2015 at 12:58 PM
Updated on Apr 20, 2015 at 5:32 PM

It's a big day on the biopharmaceutical front, and sector component Regulus Therapeutics Inc (NASDAQ:RGLS) is no exception. The stock has rallied nearly 16% to trade at $19.75, after the company said it will fast-track the development of its hepatitis C drug, as well as begin to enroll patients in a mid-stage study of its treatment for Alport Syndrome, a genetic disorder of the kidneys. Against this backdrop, calls are crossing the tape at almost nine times the average intraday rate, and are outpacing puts by a more than 10-to-1 margin.

Most active is RGLS' February 20 call, with all signs suggesting new long positions are being initiated. By buying the calls to open, speculators expect the equity to break out above the strike by the close on Friday, Feb. 20 -- when back-month options expire. The security surpassed this round-number barrier earlier, when it topped out at an intraday peak of $20.18.

From a wider sentiment perspective, today's call-skewed session is just more of the same. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, speculators have bought to open 4.69 calls for every put over the past 10 sessions. With more than 24% of Regulus Therapeutics Inc's (NASDAQ:RGLS) float sold short, though, a portion of this activity may have been at the hands of short sellers hedging their bearish bets.

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