Option Bears Pile On MannKind Corporation (MNKD)

MannKind Corporation (MNKD) is seeing buy-to-open activity at its May 5.50 put

Apr 24, 2015 at 1:38 PM

MNKD

MannKind Corporation (NASDAQ:MNKD) is having a rough day, down 2.8% at $4.82 -- bringing its year-to-date deficit to 7.7%. Options traders have responded, too, as the biopharmaceutical firm's puts are running at a slightly faster-than-usual clip.

Digging deeper, MNKD's most active option is the May 5.50 put. It looks like speculators are purchasing to open these in-the-money positions, expecting the stock to extend its losses through the close on Friday, May 15 -- when front-month options expire. Based on the volume-weighted average price (VWAP) of $0.88, breakeven on the transaction is $4.62 (strike less VWAP).

By no means are these the only traders that are bearish toward MNKD. A hefty 36.6% of the equity's float is sold short. At the stock's typical daily trading levels, it would take more than one month to repurchase all of these bearish bets.

A majority of the analysts covering MannKind Corporation (NASDAQ:MNKD) also rate it a "hold" or worse. However, the security's average 12-month price target of $7.78 represents expected upside of 61% to MNKD's current perch, which could pave the way for a round of price-target cuts.

Follow @Schaeffers

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!