Gilead Sciences, Inc. (GILD) Put Players Make Rare Appearance

Gilead Sciences, Inc. (NASDAQ:GILD) is one more victim of Hillary Clinton's price-gouging tweet

by Josh Selway

Published on Sep 21, 2015 at 3:17 PM
Updated on Jun 24, 2020 at 10:16 AM

Gilead Sciences, Inc. (NASDAQ:GILD) is yet another biotech stock hurting today, due to presidential nominee Hillary Clinton's anti-price-gouging tweet. Although this comes directly on the heels of positive late-stage trial data for GILD's hepatitis C treatment, the shares were last seen 2.8% lower at $105.46 -- which has led to a fresh round of bearish option trading. 

By the numbers, GILD puts are changing hands at a pace 1.6 times the intraday average. Traders have taken a particular interest in the 107 strike, and appear to be buying to open the weekly 9/25 and October puts. If traders are indeed purchasing new positions, they are betting on extended losses from the drugmaker through this Friday's close, and the close on Friday, Oct. 16 -- the contracts' respective expiration dates. 

This preference for puts over calls is a sudden change for GILD speculators. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security has amassed a call/put volume ratio of 3.07. Not only does this mean more three calls have been bought to open for each put, but it also ranks higher than 86% of all other readings from the past year. This signals a stronger-than-usual appetite for calls over puts. 

Elsewhere on the Street, analysts have taken a decidedly bullish tone. Sixteen brokerage firms cover GILD, 13 of which say the shares are a "buy" or better. Moreover, the equity's average 12-month price target of $125.06 represents a 19% premium to current levels, and territory never before charted. 

Regardless, Gilead Sciences, Inc. (NASDAQ:GILD) has been a steady climber on the charts. Even with today's losses, the stock is 12% higher year-to-date. 

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