Popping Inovio Pharmaceuticals, Inc. (INO) Gets Bulls' Attention

Inovio Pharmaceuticals Inc (INO) traders are banking on additional upside

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Published on Apr 14, 2015 at 1:28 PM
Updated on Apr 20, 2015 at 5:32 PM

Inovio Pharmaceuticals Inc (NASDAQ:INO) is having a standout day -- jumping 4.2% to trade at $10.29, and bringing its year-to-date lead to 12%. Option traders have responded, setting their sights on the drugmaker's calls.

Getting into the data, INO calls are being exchanged at twice the usual intraday rate. By the numbers, there are 767 contracts on the tape, more than three times the 208 puts traded. Looking more closely, one group of speculators may be banking on the shares to extend their lead deeper into double-digit territory, buying to open the stock's May 10 call for a volume-weighted average price (VWAP) of $1.20. As such, breakeven on the transaction is $11.20 (strike plus VWAP) -- territory not explored since mid-November.

Bullish betting is business as usual for INO. During the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), more than 1,100 calls have been bought to open, versus fewer than 20 puts. Echoing this, the stock's Schaeffer's put/call open interest ratio (SOIR) -- measuring open interest among options expiring in three months or less -- sits at 0.29, in the call-skewed 5th percentile of its annual range.

Option players aren't the only ones enamored with Inovio Pharmaceuticals Inc (NASDAQ:INO). All six analysts tracking the shares have designated them a "strong buy," and the equity's average 12-month price target of $20.80 is more than double current trading levels. However, as mentioned last week, short sellers remain skeptical of INO.


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