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.
 

Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!