Is Sentiment Shifting in Biogen Idec Inc.'s (BIIB) Options Pits?

Biogen Idec Inc (BIIB) reports fourth-quarter earnings next week

Digital Content Group
Jan 21, 2015 at 9:58 AM
facebook twitter linkedin


Biogen Idec Inc (NASDAQ:BIIB) surged on Tuesday, adding 3% to settle at $363.28 -- an all-time closing high. However, despite the stock's long-term uptrend, puts remain the options of choice. BIIB's Schaeffer's put/call open interest ratio (SOIR) comes in at 1.23, in the 99th percentile of its annual range. This suggests near-term speculators have only been more put-skewed 1% of the time in the past 52 weeks. But, considering BIIB's technical tenacity, some of these puts may have been purchased by shareholders looking for a short-term hedge.

Sentiment could be shifting to the bullish side, though. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day call/put volume ratio of 1.56 stands higher than 93% of all other readings from the past year. In other words, option buyers have initiated bullish bets over bearish at a faster-than-usual clip during the past 10 weeks.

The sentiment among brokerage firms also paints a more positive light on Biogen Idec Inc (NASDAQ:BIIB), as 13 out of 18 covering analysts rate it a "buy" or better. Again, this isn't too surprising, given the security's technical strength. In the past two months, BIIB has outperformed the S&P 500 Index (SPX) by roughly 23 percentage points, and recently bounced off support from its 30-day moving average. BIIB, which was last seen 1% lower at $359.58, is scheduled to report its fourth-quarter earnings next Wednesday morning.

Daily Chart of BIIB Since Dec. 5, 2014
 

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! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners