Most Active Weekly Options: Sarepta Therapeutics Inc and Chesapeake Energy Corporation

Sarepta Therapeutics Inc (NASDAQ:SRPT) and Chesapeake Energy Corporation (NYSE:CHK) are making big moves, and weekly options traders are taking note

Sep 19, 2016 at 11:37 AM
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The 20 stocks listed in the table below have attracted the highest weekly options volume during the past 10 trading days. Stocks highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. Two notable names are eteplirsen maker Sarepta Therapeutics Inc (NASDAQ:SRPT) and energy stock Chesapeake Energy Corporation (NYSE:CHK).

most active weekly options september 19

SRPT is booming, after the Food and Drug Administration (FDA) granted accelerated approval to the biotech's Duchenne muscular dystrophy (DMD) drug, eteplirsen. This fundamental win concludes a long road for SRPT, which, most recently, has seen its shares nearly double in value since last Tuesday's close as signs began emerging that an FDA go-ahead could be on the horizon. Today, after being halted earlier for volatility, shares of SRPT were last seen up 71% at $48.18, and fresh off a two-year high of $52.30.

The energy in the options pits is just as palpable, with stock and options volume both trading in the 100th annual percentiles. By the numbers, 36,464 put options have changed hands on SRPT, compared to 27,100 call options. Most active is the weekly 9/23 43-strike call, where it looks like speculators are selling to close their in-the-money options.

Elsewhere, there appears to be a mix of buy- and sell-to-open activity occurring at Sarepta Therapeutics Inc's weekly 9/23 43-strike put. Those buying to open the puts expect SRPT to retreat back below $43 by this Friday's close, when the weekly series expires. Conversely, those writing the puts to open expect $43 to serve as a short-term floor.

CHK is failing to capitalize on soaring oil prices and a price-target hikes from Scotia Howard (to $8) and Goldman Sachs (to $7.75), with the energy stock down 3.4% at $7.10. This puts a crimp in the stock's recent rebound, with CHK almost doubling since its late-May low at $3.56.

Nevertheless, calls are crossing at a faster-than-usual clip on CHK, and are outpacing puts by a more than 3-to-1 margin. It looks like a number of traders are betting on an end-of-week rebound, too, with buy-to-open activity detected at CHK's weekly 9/23 7.50-strike call.

While this accelerated call activity just echoes the withstanding trend -- CHK's 10-day call/put volume ratio of 2.13 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 71st annual percentile -- there could be an ulterior motive. More than 16% of Chesapeake Energy Corporation's float is sold short, meaning short sellers could be buying to open out-of-the-money calls to guard their bearish bets against any additional upside risk.

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