Seres Therapeutics Options Volume Peaks After AstraZeneca News

MCRB is a heavily shorted stock

Mar 11, 2019 at 2:24 PM
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The shares of Seres Therapeutics Inc (NASDAQ:MCRB) are up 22.5% to trade at $6.26, after the microbiome specialist announced a three-year research collaboration with AstraZeneca (AZN) to study how microbiomes may impact the response to cancer treatments. The surge -- which has MCRB stock near the top of the Nasdaq -- has sparked unusually heavy trading in the options pits.

At last check, 1,077 puts and 568 calls have changed hands -- light on an absolute basis, but 82 times the average daily volume, and a new annual peak. Short-term volatility expectations are skyrocketing, too, with the stock's 30-day at-the-money implied volatility docked at a 52-week peak of 132.3%.

New positions are being initiated at the March 7.50 call and put, though it's not clear if these positions are being bought or sold. The $7.50 level has been popular among MCRB options traders, with the July 7.50 put currently home to peak open interest -- though these front-month options will likely emerge as the most heavily populated strikes overnight.

Elsewhere on Wall Street, Seres Therapeutics has been heavily targeted by short sellers. Short interest rose 2.7% in the most recent reporting period to 3.9 million shares, representing 11.5% of the security's available float, or 33.8 times its average daily pace of trading. As such, some of today's upside could be due to shorts covering.

Looking closer at the charts, today's rally ran into trouble at a trendline connecting lower highs since June. Below here is MCRB's 200-day moving average, which has helped usher the shares lower since October 2017. That said, the equity is still on track for its best day since March 16, 2017, when it jumped 37.1%, and is now 38.5% higher on the year.

mcrb stock daily chart march 11


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