Calls Popular As Incyte Stock Cheers Cancer Drug Data

INCY call volume has doubled its intraday norm today

Managing Editor
Oct 19, 2018 at 2:19 PM
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Earlier today, Incyte Corporation (NASDAQ:INCY) reported upbeat results from its mid-stage study of Capmatinib, the company's lung cancer treatment sponsored by Novartis (NOVN). Incyte Corporation says the successful development could net over $500 million in future milestones. INCY stock is up 3.4% to trade at $66.56 as a result, and options traders are piling on in the wake of the good news. 

At last check, nearly 800 calls have been traded -- double what's typically seen at this point in the day. Much of the action has centered at the November 75 call, the most popular option. It's not clear how traders are positioning themselves here, but it's worth nothing that Incyte reports third-quarter earnings before-the-open on Oct. 30. 

More broadly, there's been a heavier-than-usual call bias among options traders within the past two weeks. Amid light absolute volume, INCY's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 5.48 and ranks in the 83rd annual percentile, showing a heightened interest in call buying relative to put buying. 

Perhaps today's rally was already in the cards, given INCY flashed this bullish signal last week. Nevertheless, it's still staring at a 30% deficit in 2018 and has encountered stiff resistance at the 160-day trendline. Analysts remain bullish, though. Of the 18 brokerages covering the equity, 10 rate it a "buy" or better, while its consensus 12-month price target of $83.60 is a 26% premium to its current perch. 

Daily Stock Chart INCY


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