Sizzling Sarepta Therapeutics Inc (SRPT) Targeted by Option Bulls

Sarepta Therapeutics Inc (SRPT) has more than doubled in value this week

Sep 22, 2016 at 3:02 PM
facebook twitter linkedin

Sarepta Therapeutics Inc (NASDAQ:SRPT) is sizzling once again, in what's been a banner week for the biotech stock. Right now, the shares are 6.2% higher at $59.67 following last night's announcement of a $225 million stock offering, bringing their week-to-date advance to 112%. What's more, short-term traders are piling into SRPT's options pits.

Looking at the 10 most active options, six belong to the already popular weekly 9/23 series. In the lead is the weekly 9/23 60-strike call, where buy-to-open activity is likely taking place. The goal for buyers is for SRPT to extend its lead back above the round $60 level, and potentially into new multi-year-high territory, by expiration tomorrow night. Earlier, in fact, the biotech stock touched a 14-year peak of $61.60.

While call buyers are on the prowl, options traders have recently been betting on -- or protecting their long stock positions against -- losses, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). SRPT's 10-day put/call volume ratio of 1.15 outstrips nearly four-fifths of all readings from the prior year, hinting at a pronounced bearish bias.

Given the biotech's colossal gains in recent sessions, it wouldn't be surprising for options traders to expect some short-term speed bumps. After all, SRPT's 14-day Relative Strength Index (RSI) has swelled to nearly 85, well into overbought territory.

At the same time, however, there's still plenty of cash on Sarepta Therapeutics Inc's (NASDAQ:SRPT) sideline. One-third of the stock's float is sold short, representing over eight sessions' worth of pent-up buying power, at the equity's typical trading levels.

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.


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners