Option Bears Turn Up the Heat on Amgen, Inc. (AMGN)

Short-term traders are once again targeting Amgen, Inc. (AMGN) put options

by Alex Eppstein

Published on Mar 9, 2016 at 2:19 PM

Amgen, Inc. (NASDAQ:AMGN) is in focus today, as biotech stocks struggle amid potential changes to Medicare Part B reimbursements. At last check, the shares have fallen 2.7% to trade at $140.78, while option traders are rolling the dice on the stock's end-of-week trajectory.

Taking a quick step back, AMGN puts are crossing the tape at triple the normal intraday rate, and nearly doubling the number of calls traded so far. The stock's most active option is the weekly 3/11 140-strike put, where it seems speculators are buying to open contracts -- expecting the stock will settle below $140 this Friday afternoon, when the weekly series expires.

It's nothing new for AMGN option traders to be purchasing puts. In fact, the stock's 10-day put/call volume ratio of 0.98 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) outstrips 94% of comparable readings from the last year. Echoing this preference for bearish bets over bullish is AMGN's Schaeffer's put/call open interest ratio (SOIR) of 1.09. Not only does this SOIR mean short-term puts outnumber calls, but the ratio likewise sits just 3 percentage points from an annual put-skewed peak.

Skepticism can be detected outside of the options arena, as well. In fact, three-fifths of covering analysts consider AMGN worthy of a lukewarm "hold" rating.

There's a reason that Wall Street has failed to get behind Amgen, Inc. (NASDAQ:AMGN). Specifically, the stock has performed poorly on the charts, losing over 13% year-to-date.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


A Schaeffer's exclusive

TOP STOCK PICKS 2020

Access your FREE insider report before it's too late!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


IRA/401k: The Crash-Proof Retirement Plan
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.
Stocks Eye Notable Weekly Gains on 3-Day Surge
Stocks are eyeing big weekly gains
WW Stock Brushes Off Bull Note
Morgan Stanley upgraded the Weight Watchers parent to "overweight" from "equal weight"
IRA/401k: The Crash-Proof Retirement Plan
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.