Brokerage Backlash Sends Esperion Therapeutics Inc (ESPR) Tumbling

Esperion Therapeutics Inc (NASDAQ:ESPR) is sharply lower today, but call volume is accelerated

May 22, 2015 at 10:58 AM
facebook X logo linkedin

Similar to fellow drugmaker Otonomy Inc (NASDAQ:OTIC), Esperion Therapeutics Inc (NASDAQ:ESPR) is having a rough day. The shares were off nearly 11% at their intraday low -- and were last seen down 6.8% at $106.02 -- after receiving a dreary analyst note. What's more, the stock has earned itself a spot on the short-sale restricted list. The sell-off has done little to sway option traders' enthusiasm, with calls changing hands at seven times what's typically seen at this point in the day, and outpacing puts by a nearly 3-to-1 margin.

Seeing the most action in ESPR's options pits thus far is the June 115 call. It appears as if traders are purchasing new positions here for a volume-weighted average price (VWAP) of $3.46, making breakeven for the call buyers $118.46 (strike plus VWAP). This is just a stone's throw away from the security's record high of $120.96, tagged yesterday.

Today's call-skewed session is just more of the same toward a stock that had nearly tripled in value year-to-date heading into today's trading. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 2.57 calls for each put over the past two weeks.

Plus, ESPR sports a Schaeffer's put/call open interest ratio (SOIR) of 0.50. In other words, call open interest doubles put open interest among options expiring in three months or less.

As touched upon, Esperion Therapeutics Inc (NASDAQ:ESPR) is falling today after receiving some bearish backlash from the brokerage bunch. Specifically, Chardan Capital Markets initiated coverage on the stock with a "sell" rating and a $55 price target -- a more than 48% discount to current trading levels -- citing a dangerous risk-reward profile. Analysts seem to be at odds, as this runs counter to the upbeat "overweight" initiation ESPR received at Barclays Wednesday, which went along with a $150 price target.

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI