OvaScience, Inc. (OVAS) Bulls Hope for a Breakout to New Highs

OvaScience Inc (NASDAQ:OVAS) has yet to trade north of the round-number $60 mark

by Karee Venema

Published on Apr 27, 2015 at 2:12 PM

It's a rough day for biotechs, and OvaScience Inc (NASDAQ:OVAS) is no exception. The stock is down 4% at $29.19, but option traders aren't worried. At last check, calls were crossing the tape at 1.3 times the average intraday rate -- and are outpacing puts by a nearly 6-to-1 margin -- with a number of speculators apparently gambling on a breakout to all-time highs over the next two months.

Specifically, OVAS' June 60 call has garnered the most attention today, and it appears as if new long positions are being initiated here. By buying to open the calls, traders are betting on OVAS to topple the round-number $60 mark by the close on Friday, June 19, when back-month options expire. This time frame could possibly include the company's next earnings report and annual shareholders meeting, tentatively scheduled for early May and June, respectively.

Today's call-skewed session is just more of the same in OVAS' options arena. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 15 calls for every put over the past 10 days. Additionally, the equity's Schaeffer's put/call open interest ratio of 0.11 suggests call open interest outweighs put open interest by a roughly 10-to-1 ratio among options expiring in three months or less.

On the charts, OvaScience Inc (NASDAQ:OVAS) has been making a beeline lower since topping out at an all-time peak of $55.69 in late March, off 48%. More recently, the stock has struggled against its 10-day moving average, and has only closed north of this trendline two times since March 26.


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