Bulls Make a Beeline for Rallying Novavax, Inc. (NVAX)

Novavax, Inc. (NVAX) is flying high on a bullish brokerage note


Published on Jan 9, 2015 at 12:04 PM
Updated on Apr 20, 2015 at 5:32 PM

It's been another big day for biopharmaceutical stocks, and Novavax, Inc. (NASDAQ:NVAX) is no exception. Shares of the vaccine developer are up 7.2% to trade at $6.38, after Janney Capital initiated coverage with a "buy" rating and $11 price target. These developments have brought call traders out in droves.

Specifically, the contracts are being exchanged at 12 times the average rate for this point in the session. Additionally, NVAX's 30-day at-the-money implied volatility has surged 20.2% to 64.9%, hinting at elevated demand for short-term options. Seeing the most attention is the out-of-the-money February 7 call, where speculators are initiating long positions to gamble on additional upside through back-month options expiration, the evening of Feb. 20.

This propensity for call buying relative to put buying is more of the same for NVAX. During the last 10 days, nearly 1,300 calls have been bought to open at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), compared to just 12 puts. The resultant call/put volume ratio of 106.58 rests just 6 percentage points from an annual high.

On the charts, today's rally has Novavax, Inc. (NASDAQ:NVAX) sitting on a more than 23% year-over-year advantage. Ushering the shares higher since mid-October has been their ascending 30-day moving average.

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