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
facebook twitter linkedin


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.
 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners