SurgiBot Speculation Sparks Bullish Betting on TransEnterix, Inc. (TRXC)

The FDA is expected to issue its decision on TransEnterix, Inc.'s (NYSEMKT:TRXC) SurgiBot System by mid-April

Apr 6, 2016 at 12:03 PM
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TransEnterix, Inc. (NYSEMKT:TRXC) has jumped 14.7% to $5.93, as optimism builds ahead of a decision from the Food and Drug Administration (FDA) over the firm's SurgiBot System -- with the review slated for completion by mid-April. As the buzz builds, both TRXC stock and option volume are near the top percentile of their annual ranges -- with the latter trading at eight times the average intraday rate.

By the numbers, 9,736 call options have changed hands, compared to 1,694 put options. Most active are TRXC's May 8 and October 10 calls, where a collective 3,075 contracts have traded. It looks as if both strikes have seen some buy-to-open activity, as speculative players roll the dice on additional gains over the next several months.

More broadly speaking, today's call-skewed session only echoes the recent activity seen in TRXC's otherwise low-volume options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 5,141 calls have been bought to open on TRXC during the past 10 sessions, compared to just 524 puts.

Drilling down, the aforementioned May 8 call has seen the biggest rise in open interest over this time frame, with 1,253 contracts added. The May 5 strike has also been popular among call traders, with 1,038 contracts added over the past 10 sessions.

Outside of the options pits, analysts have taken a glass-half-full approach to the medical equipment maker. In fact, all five brokerages covering the shares maintain a "buy" or "strong buy" rating.

Technically speaking, TransEnterix, Inc. (NYSEMKT:TRXC) has been on a tear for most of 2016, up 285% from its January low of $1.54. What's more, thanks to today's bull gap, the stock is on pace to notch its highest daily close since June, 19, 2014.

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