Options Hot as Anavex Life Sciences Corp. (AVXL) Gaps Lower

Anavex Life Sciences Corp. (NASDAQ:AVXL) has plunged nearly 31% this afternoon

Jul 27, 2016 at 3:13 PM
facebook X logo linkedin

After spending most of the day hovering near breakeven, Anavex Life Sciences Corp. (NASDAQ:AVXL) began selling off sharply around 1:00 p.m. ET, as traders panned the biotech's mid-stage trial update for its Alzheimer’s treatment. While the stock was halted a number of times, it has since resumed trading -- last seen down 30.8% at $5.18, and on the short-sale restricted list. Options traders, meanwhile, are blitzing AVXL stock -- with both call and put volume hitting 52-week peaks.

Diving deeper, around 8,700 call options have changed hands so far, compared to 1,740 put options. Most active on the call side is the August 7.50 strike, where it looks like new positions are being purchased. Put players, meanwhile, appear to be buying to open AVXL's August 5 strike. If this is indeed the case, call buyers expect the equity to be sitting north of $7.50 at the close on Friday, Aug. 19 -- when front-month options expire -- while put buyers are betting on the stock settling south of $5.

Widening the sentiment scope reveals call buyers have recently had the upper hand in AVXL's lightly traded options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for instance, speculative players have bought to open 3,004 calls in the past 10 sessions, compared to 330 puts. Specifically, the stock's August 7.50 call has seen the biggest rise in open interest over this time frame, with 2,369 contracts added.

Considering AVXL closed just one penny shy of this strike yesterday, some of the activity over the past two weeks at the August 7.50 call may have been at the hands of "vanilla" option bulls. However, given today's bear gap -- which has sent Anavex Life Sciences Corp. (NASDAQ:AVXL) into the red on a year-to-date basis -- it's possible some of today's action at this now out-of-the-money strike is a result of short sellers hedging against a quick bounce. Nearly 13% of AVXL's float is sold short.

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 C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI