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.

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners