EXACT Sciences Stock Options Pop After Citron Swipe

EXACT Sciences options volume is at a 12-month high

May 15, 2017 at 3:24 PM
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EXACT Sciences Corporation (NASDAQ:EXAS) shares are trading down today, after Andrew Left of Citron Research issued scathing words for the cancer testing name. Specifically, the noted short seller said the company is "losing money on an inferior product," and that EXAS stock "will soon be cut in half," and could likely be in the single digits or at zero in three to five years. As the security sells off amid increased stock volume, EXAS options are drawing a crowd, too, with more than 41,000 contracts traded -- a new 52-week peak.

Drilling down, 22,543 puts and 18,500 calls have changed hands, with the former on track to settle in the 100th annual percentile and the latter already at a 12-month high. The May 33 call has garnered the most attention so far, with 9,793 contracts traded. It looks as if new positions are being purchased here, as call buyers bet on a quick bounce back above $33 by week's end, when the front-month options expire.

On the put side, the May 34 strike is most active, with 4,980 contracts exchanged. It seems likely there's some buy-to-open activity occurring here, as put buyers brace for a steeper retreat over the next several sessions. Regardless of where EXAS ends the week, though, the most either set of option buyers has risked is the initial premium paid.

More broadly speaking, it's been puts that have been preferred over calls among EXAS options traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 1.19 ranks in the elevated 89th annual percentile, meaning puts have been bought open over calls at a quicker-than-usual clip.

Plus, the security's Schaeffer's put/call open interest ratio (SOIR) of 1.13 ranks higher than all other comparable readings taken in the past year. In other words, short-term options traders are more put-heavy now toward EXAS stock than they've been at any other point during the last 12 months.

Given EXAS stock was up more than 150% year-to-date heading into today's trading session -- and hit a record peak of $36.14 on May 8 -- it's likely that EXACT Sciences options traders have been initiating protective puts, though. At last glance, EXAS shares were off 5.4% at $31.99.

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