Tilray Stock Record High Sparks Heavy Options Trading

Tilray said it's been cleared to export medical cannabis to Germany

by Karee Venema

Published on Sep 13, 2018 at 11:17 AM

The shares of Tilray Inc (NASDAQ:TLRY) are higher for a fourth straight day, after the Canada-based company was granted approval to export medical cannabis to Germany -- extending its European footprint. At last check, TLRY stock was up 6.9% at $113, fresh off a record high of $116.60.

Tilray stock has been a standout on the charts since its public trading debut back in July, up more than 390% since its July 19 open at $23.05. What's more, the shares are pacing for their fifth consecutive weekly double-digit percentage gain, adding 41.3% this week alone.

tilray stock price chart on sept 13

Options traders have been quick to react to this volatile price action, too. Already today, 26,000 calls and 17,000 puts have changed hands -- more than three times what's typically seen at this point, and volume pacing in the 97th annual percentile.

Despite the skew toward calls, a number of speculators this morning appear to be bracing for an end-of-week pullback. Specifically, it looks like new positions are being purchased at the weekly 9/14 90- and 100-strike puts, which expire at the close tomorrow, Sept. 14.

Widening the scope shows put players have actually dominated Tilray's options pits. There are currently 96,838 puts and 64,299 calls open on TLRY -- an all-time peak. Peak put open interest in the front-month series is found at the September 50 strike, and data from the major options exchanges confirms notable buy-to-open activity.

Given the weed stock's run up the charts, part of the activity at these out-of-the-money strikes could be of the hedging variety. Whatever the reason, the most the put buyers stand to lose is the initial premium paid.

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