Option Bulls Flock to Penny Stock After Weed Deal

AMRS stock is set for its best day ever

Digital Content Manager
Feb 5, 2019 at 12:49 PM
facebook twitter linkedin


Biotechnology stock Amyris Inc (NASDAQ:AMRS) is near the top of the Nasdaq today, after the company announced a big weed deal. Specifically, Amyris said it's partnering with an undisclosed party in a cannabinoid development, licensing, and commercialization plan valued at as much a $255 million. AMRN stock was up 39.1% at $4.40, at last check, and is pacing for its best day ever. 

Prior to today, a mid-November bear gap brought on by a third-quarter revenue miss had AMRS stock trading in a channel of lower highs and lows -- bottoming out at a 17-month low of $2.64 on Jan. 30. However, the equity has nearly doubled since then, and is set to top its 60-day moving average for the first time since its October highs. 

AMRS Jan 5

Today's news is causing unusual options activity, too, with nearly 8,000 AMRS calls changing hands -- roughly 70 times the average intraday volume. Puts, while dwarfed by calls, are trading at a much quicker clip than usual, as well, with 600 contracts traded -- representing roughly eight times the expected intraday pace. Total option volume is on pace for an annual high.

It looks like much of the action is transpiring around the February 5 and June 7.50 calls, with buy-to-open action detected. Buyers of the front-month call expect AMRS stock to surpass $5 by the close on Friday, Feb. 15, when the options expire. The June-dated call buyers expect the shares to surpass $7.50 by June options expiration.

Some of those out-of-the-money call buyers, however, could be short sellers seeking an options hedge. In the past two reporting periods, short interest shot up 7.3% to 9.27 million shares, and now represents a whopping 26.3% of the stock's available float. At AMRS' average daily trading volume, it would take almost three weeks for traders to buy back these bullish bets -- plenty of fuel for a short squeeze, should the stock continue its rally. 

 

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Stock Pick Report
 


 


 
Special Offers from Schaeffer's Trading Partners