How This Sarepta Therapeutics Options Buyer Scored Big

SRPT stock hit a record high earlier

Jun 19, 2018 at 2:31 PM
facebook twitter linkedin


Options volume has exploded on Sarepta Therapeutics Inc (NASDAQ:SRPT) today, pacing in the 99th annual percentile. With SRPT stock surging on the back of upbeat data for its Duchenne muscular dystrophy (DMD) treatments, some of the action is a result of speculators liquidating positions -- with one trader in particular closing out a big winner.

At last check, SRPT shares were trading up 36.6% at $143.73, earlier hitting a record high of $176.50, after the company's DMD gene therapy lowered serum creatine kinase (CK) by 87% in the three enrolled patients. In the options pits, 20,135 calls and 11,281 puts are on the tape -- nearly 11 times what's typically seen at this point in the day.

Most active is the weekly 6/22 150-strike call, where it looks like one trader may be cashing out of their deep in-the-money weekly 6/22 105-strike calls and using the profits to bet on more upside for the drug stock through week's end. Whatever the reason, Trade-Alert notes a number of those lower-strike calls were bought to open last Friday for a volume-weighted average price (VWAP) of $7.10. Today, the VWAP on these calls was last seen at $51.92, meaning the call buyer is staring at a 631% profit.

Looking at the charts, SRPT stock had been barreling higher over the last 12 months -- adding 212% year-over-year through last night's close. And today's surge could shake some of the remaining shorts loose, which might create even bigger tailwinds for the security. Although short interest fell 12.7% in the most recent reporting period, these bearish bets still account for almost 17% of Sarepta Therapeutics' available float, or 8.7 times the average daily pace of trading.

srpt stock daily chart june 19

Bernie's Best Stock Bets for Summer 2021

1608308875

 




 
Special Offers from Schaeffer's Trading Partners