Calls Popular on Surging GW Pharmaceuticals plc (GWPH)

GW Pharmaceuticals PLC - ADR (GWPH) calls are in high demand

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Published on Mar 13, 2015 at 2:24 PM
Updated on Jun 24, 2020 at 10:16 AM

GW Pharmaceuticals PLC - ADR (NASDAQ:GWPH) is booming today, though it's not exactly clear what's causing the rally. The stock was last seen 10.4% higher at $93.36, and call-focused traders are having a field day. The contracts are crossing at 16 times the average intraday rate, and outpacing puts by a more than 6-to-1 margin.

Digging deeper, nine of GWPH's 10 most active contracts are calls, with the in-the-money March 90 call currently in the top spot. With buy-to-open activity detected here, traders are gambling the shares will top the breakeven price of $92.41 (strike plus volume-weighted average price of $2.41) by the close next Friday, when front-month options expire.

Call buying is not in the least bit rare in GWPH's options pits, according to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Across this trio of exchanges, the security's 10-day call/put volume ratio of 4.72 ranks higher than 90% of all other readings from the past 52 weeks.

What's more, the equity's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.44, lower than 90% of all such readings from the past year. This reveals GWPH's short-term traders are more call-skewed than normal.

Despite today's rally, GW Pharmaceuticals PLC (NASDAQ:GWPH) has lost 16.2% since hitting an all-time high of $111.46 in early July. Analysts have kept the faith, though, with all four brokerage firms covering the stock calling it a "strong buy." Moreover, GWPH's average 12-month price target comes in at a whopping $380.


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