Inovio Pharmaceuticals Inc (INO) Rally Draws Call Players

Unlike some of its biotech sector peers, drugmaker Inovio Pharmaceuticals Inc (NASDAQ:INO) is surging today, up 12.1% at $6.02. Sparking the jump is news INO and GeneOne Life Science will begin begin enrolling patients in their Middle East respiratory syndrome (MERS) vaccine study. (The two announced last Friday that they will collaborate on a treatment for zika, as well.) Amid this accelerated price action, the equity's options pits are hopping -- with calls changing hands at 15 times the average intraday rate, and outpacing puts by a 73-to-1 ratio.

Drilling down, it appears call players are utilizing a variety of strategies. For instance, the February 7 call -- INO's most active option -- could be seeing some sell-to-open activity. If this is the case, speculators are hoping $7 holds as a ceiling through the close on Friday, Feb. 19, when front-month options expire. In this best-case scenario, the calls will expire worthless, and the speculators can keep the initial premium collected as their full potential reward.

Elsewhere, it looks as if call buyers are honing in on INO's March 6 strike -- the second most-active option on the tape. For those purchasing new positions here, their profit will increase with each step above $6 the security takes through March options expiration. Their risk, however, is limited to the premium paid.

Although INO's options pits are less active than high-profile names like Twitter Inc (NYSE:TWTR) or Apple Inc. (NASDAQ:AAPL), those populating it have shown a distinct preference for long calls over puts in recent months. In fact, over the past 50 sessions, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 1,500 calls, versus just 3 puts.

Echoing this call-skewed bias is INO's gamma-weighted Schaeffer's put/call open interest ratio (SOIR) of 0.42. What this shows is that near-the-money call open interest more than doubles put open interest among options set to expire in three months or less.

Technically speaking, today's pop marks a change of pace for a stock that's been making a series of lower lows since plunging into the single digits in April 2014. More specifically, the shares have faced increasing pressure from their 30-week moving average since early May, and hit a two-year low of $4.50 during last Wednesday's broad-market bloodbath.