Valeant Pharmaceuticals Intl Inc (VRX) Option Buyers Go Bargain Hunting

The options market is pricing in low volatility expectations for Valeant Pharmaceuticals Intl Inc (NYSE:VRX)

Jun 21, 2016 at 3:09 PM
facebook X logo linkedin

While Bill Ackman may be winning with Herbalife Ltd. (NYSE:HLF) today, the activist investor is taking another hit with Valeant Pharmaceuticals Intl Inc (NYSE:VRX). At last check, the biotech stock was down 3.6% at $21.69, and fresh off a nearly six-year low of $21.41. Nevertheless, one optimistic options traders is holding out hope that VRX stock rebounds over the next several weeks.

Amid a slower-than-average session in VRX's options pits, the stock's July 23 call has garnered notable attention. It seems safe to assume new positions are being purchased at this front-month strike, meaning call buyers are anticipating a rally north of $23 by the time the options expire at the close on Friday, July 15.

These optimistic expectations are nothing new for VRX options traders. And while there may be an ulterior motive to the recent rush of call buying, traders are nonetheless getting a relatively good deal on the stock's short-term calls.

For starters, VRX's Schaeffer's Volatility Index (SVI) of 71% ranks in the 32nd annual percentile, suggesting premium on the equity's near-term options is pricing in low volatility expectations at the moment. Plus, its Schaeffer's Volatility Scorecard (SVS) of 80 indicates the options market has historically underpriced Valeant Pharmaceuticals Intl Inc's (NYSE:VRX) ability to make big moves over the past 12 months.

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.


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 calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI