Novavax, Inc. (NVAX) Options Hot After Director Doubles Stake

Novavax, Inc. (NVAX) call options are flying off the shelves after a director bought 100,000 shares

Sep 22, 2016 at 3:39 PM
facebook X logo linkedin


Novavax, Inc. (NASDAQ:NVAX) is once again making headlines after director Gail Boudreaux purchased 100,000 NVAX shares on Tuesday, for $1.45 each. Boudreaux now owns 200,000 shares of NVAX stock, and her latest acquisition has been viewed as a much-needed vote of confidence in the biotech. Against this backdrop, NVAX options are flying off the shelves today.

NVAX had a rough go of it last week, plummeting nearly 85% to a seven-year low, after disappointing Phase 3 trial data for a respiratory vaccine. However, the biotech has managed to rebound 85% off of its low of $1.16, though it still sits well below its pre-bear gap prices. Today, NVAX is up 10.8% at $2.15, a 48% premium to what Boudreaux paid on Tuesday.

NVAX options are crossing the tape at  twice their usual intraday clip, with calls more than tripling puts, 30,000 to 9,735. Options volume is set to hit the 99th percentile of NVAX's annual range, with nine of the 10 most active options today being calls. However, given the relatively limited number of available put strikes on a stock currently trading just above $2, this bias may be a matter of necessity rather than an indicator of strong bullish appetites.

Among today's most active options is the October 2 put, but most of the action appears to be of the sell-to-open variety, indicating the traders are betting on a near-term floor at $2. Meanwhile, "vanilla" bulls are seemingly buying to open October 2.50 calls, to bet on extended short-term upside for NVAX. The most popular option so far, though, is the in-the-money January 2018 1-strike call, with more than 10,000 contracts exchanged.

Widening the scope, NVAX's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at 2.27, indicating almost 2.3 calls bought to open for every put option over the last 10 trading days. However, this could again be attributed to the relatively limited number of put options available for the stock, given its low price.

Nevertheless, Novavax, Inc.'s (NASDAQ:NVAX) call open interest was already at an annual peak, even before today's call activity, with the top open interest position being the October 8 call. While many of these positions were likely established before last week's bear gap -- when the stock was trading near the $8 level -- another possibility is short sellers hedging their bets. Currently, 24.2% of NVAX's shares are sold short, which would take 13.8 days of trading to cover, at NVAX's average daily volume.

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