OvaScience (OVAS) Option Bears Dismiss Today's Surge

It's been a volatile year for OvaScience Inc (OVAS)

Digital Content Group
Apr 10, 2015 at 2:31 PM
facebook twitter linkedin


OvaScience Inc (NASDAQ:OVAS) is surging today, adding 10.8% to trade at $32.55. Still, there's a strong put-bias in the stock's options pits. The contracts are crossing at three times the typical intraday pace, with a heavy emphasis on the April 30 put. It appears some traders are buying to open the option, expecting the shares to drop back below the round-number $30 level by next Friday's close, when front-month options expire.

OVAS has been all over the place in 2015. In late March, the security climbed to a record peak of $55.69. Since then, however, the shares have slid 41.6%, and are currently consolidating atop their 200-day moving average. All-in-all, the stock has underperformed the S&P 500 Index (SPX) by nearly 43 percentage points during the past three months.

Daily chart of OVAS since January with 180-day Moving Average

OVAS' surge today may be attributed to news that some of the company's executives and directors recently bought back large chunks of shares. Another potential explanation is that the equity was oversold, and due for a short-term rally, based on its 14-day Relative Strength Index (RSI) of 33.

On the Street, all five brokerage firms covering OvaScience Inc (NASDAQ:OVAS) call it a "strong buy." However, short interest is elevated, accounting for 13.7% of the stock's float. What's more, it would take over eight sessions for these traders to buy back the shorted shares, at normal daily volumes.

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

 


 


 
Special Offers from Schaeffer's Trading Partners