Q2 STOCKS TO BUY

3 Biotechs Making Waves in the Options Arena

Biotech stocks Keryx Biopharmaceuticals (NASDAQ:KERX), Medivation Inc (NASDAQ:MDVN), and Opko Health Inc. (NYSE:OPK) are all seeing increased options activity today

Mar 29, 2016 at 1:01 PM
facebook X logo linkedin


As we await an FDA announcement relating to one drugmaker, biotech stocks Keryx Biopharmaceuticals (NASDAQ:KERX)Medivation Inc (NASDAQ:MDVN), and Opko Health Inc. (NYSE:OPK) are making outsized moves today, and option traders are responding. More specifically, all three stocks are seeing elevated call volume. Let's take a closer look at how speculators are approaching KERX, MDVN, and OPK. 

KERX is up 15.7% at $5.23, after the company's kidney disease drug posted positive results in a late-stage study. The shares are now back in the black on a year-to-date basis, as they try to live up to analysts' expectations. Specifically, seven out of the nine brokerages that cover the shares say they're at least a "buy," while none call them a "sell." 

In the options pits, call volume is running at four times the expected intraday pace, topping put volume by a nearly 3-to-1 margin. The most popular option is the April 5 call, where it's possible traders are closing in-the-money positions amid the stock's pop. One option seeing buy-to-open activity, though, is the out-of-the-money May 6 call, with traders betting on Keryx Biopharmaceuticals (NASDAQ:KERX) topping $6 -- a level that acted as resistance toward the end of 2015 -- before the close on Friday, May 20, when the contracts expire. KERX hasn't closed above $6 since Sept. 2. 

MDVN, meanwhile, is down 7.9% at $38.00, after U.S. lawmakers called on the company to lower the price of its prostate cancer drug, Xtandi. Short sellers are probably wishing they would have stuck around for this price action. Short interest on MDVN fell by roughly 12% over the past two reporting periods. Today, the stock is short-sale restricted.

While call volume is running at four times the typical intraday rate -- which only highlights the prevailing call bias -- it looks like some traders may be betting against the stock by possibly selling to open the April 50 call. If true, these speculators are wagering that Medivation Inc (NASDAQ:MDVN) will hold below the half-century mark through front-month options expiration at the close on Friday, April 15. 

Finally, OPK has dropped 2.4% to trade at $10.88, after falling 7.9% out of the gate. Traders may be jockeying for position ahead of the Food and Drug Administration's (FDA) decision on the company's drug application for Rayaldee, a treatment for hyperparathyroidism. The FDA is expected to make a decision on the application today. 

Opko Health Inc.'s (NYSE:OPK) calls are trading at 1.5 times the average intraday pace this afternoon, and the April 11 strike is leading the way. It appears traders are buying to open the strike, hoping for OPK to climb back above $11 within the next few weeks. 

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.

 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter