Relypsa Inc (RLYP) Option Volume Pops Amid Big-Cap Buyout Buzz

Relypsa Inc (NASDAQ:RLYP) options are on fire amid rumors of Merck & Co., Inc. (NYSE:MRK) interest

Dec 4, 2015 at 12:58 PM
facebook X logo linkedin


Relypsa Inc (NASDAQ:RLYP) has surged 17.2% to $26.20, after StreetInsider sources said Merck & Co., Inc. (NYSE:MRK) is interested in buying the California-based drugmaker. What's more, RLYP options are flying off the shelves, with some traders betting on a surge north of $30 in the next couple of weeks.

Total options volume is running at five times the norm, though RLYP calls are outpacing puts by a margin of 3-to-1. In fact, with more than 6,000 calls across the tape, today's volume is on pace for a 52-week high. Reflecting the growing volatility expectations, RLYP's 30-day at-the-money implied volatility has skyrocketed 36.3% to 135.7% -- just 38 percentage points from an annual high.

Most popular is the December 30 call, which is seemingly attracting new buyers. By purchasing the call at a volume-weighted average price (VWAP) of $1.51, the traders' profit will grow the higher RLYP soars north of $31.51 (strike plus VWAP) by the close on Friday, Dec. 18, when front-month options expire. Delta on the call has nearly doubled overnight, to 0.36 from 0.17, suggesting the odds of an in-the-money finish now stand at 36%.

RLYP hasn't traded atop $30 since before its October implosion, which sent the shares sinking to a record low of $10.26. In fact, the stock's plunge inspired quite a few bears, with short interest surging nearly 60% during the past two reporting periods. These pessimistic positions now account for 20.6% of RLYP's total available float. Against this backdrop, perhaps some of today's out-of-the-money call buyers are short sellers seeking a short-term hedge.

Whatever the motive, today's appetite for long Relypsa Inc's (NASDAQ:RLYP) calls is nothing new. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the biotech has racked up a 10-day call/put volume ratio of 10.58. In other words, traders have bought to open nearly 11 calls for every put during the past two weeks.
 

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 C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI