Celladon Corporation (CLDN) Downtrend Brings Out Bears

Traders are on edge ahead of trial results from Celladon Corporation (CLDN)


Published on Apr 20, 2015 at 2:38 PM
Updated on Apr 21, 2015 at 9:38 AM

Celladon Corporation (NASDAQ:CLDN) is among a number of health care stocks getting whacked today -- down 4% at $15.86 ahead of crucial results from its Mydicar gene therapy trial, due out sometime this month. In the equity's options pits, puts are running at more than twice their usual intraday rate. Also, CLDN's 30-day at-the-money implied volatility earlier touched an annual high of 418.6%, hinting at heightened anxiety levels ahead of the aforementioned data.

The most active put this afternoon is the May 17.50 strike, where likely buy-to-open activity is transpiring. Based on the volume-weighted average price (VWAP) of $7.97, the buyers are aiming for CLDN to plummet below $9.53 (strike less VWAP) by May options expiration. This would put the stock in waters not charted since mid-October.

Today's penchant for put buying is par for the course. During the past 10 days across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CLDN has racked up a put/call volume ratio of 3.43 -- with puts bought to open at more than three times the rate of calls.

Short sellers have been extremely active of late, too. During the two most recent reporting periods, short interest on CLDN nearly tripled, and now makes up 23% of its total float -- though it would take less than two days to cover these positions, at average daily trading levels.

On the charts, Celladon Corporation's (NASDAQ:CLDN) intraday losses are pretty typical. Since notching a record high of $28.25 on March 20, the stock has plunged an astounding 44%, and underperformed the broader S&P 500 Index (SPX) by about 36 percentage points.

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