Options Activity Picks Up on XOMA Corporation (XOMA) Drug Data

XOMA Corp (NASDAQ:XOMA) is headed higher on positive drug data

May 28, 2015 at 10:40 AM
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XOMA Corp (NASDAQ:XOMA) has popped 3% in early trading at $3.42, thanks to encouraging drug trial news. This has the stock's options changing hands at quadruple the expected intraday rate, with calls having a slight advantage over puts.

Among XOMA's most active strikes is the July 4 call, where buy-to-open activity is detected. These buyers are expressing confidence that the shares will topple $4 -- a level last hurdled in late March -- by the close on Friday, July 17, when back-month options expire.

Call buying has been the strategy of choice in recent months at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). In fact, XOMA's 50-day call/put volume ratio of 15.68 ranks in the 96th annual percentile.

Also optimistic are analysts. All five brokerage firms tracking XOMA consider it a "strong buy." Plus, the stock's average 12-month price target of $8.57 stands at a more than 150% premium to current trading levels -- and in annual-high territory.

On the charts, XOMA Corp (NASDAQ:XOMA) has had a less-than-stellar year. The shares are sitting on a 2015 deficit of nearly 5%, and are struggling to overcome their 40-day moving average.

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