Options Bears Jump on Battered NuVasive Stock

NUVA stock is pacing for its worst day since January

Deputy Editor
Mar 12, 2019 at 3:30 PM
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The shares of medical equipment concern NuVasive, Inc. (NASDAQ:NUVA) are sliding today, after Smith & Nephew announced plans to purchase Osiris Therapeutics, a regenerative medicine producer, for $660 million. In mid-February, NUVA stock gapped higher amid reports that Smith & Nephew held buyout talks with the company. As a result of today's bad news, NUVA stock is down 6% at $55.15 -- pacing for its worst day since January -- and put options are heating up.

Looking at the charts, NUVA stock was steadily rallying off its Jan. 8 three-year low of $43.51, before gapping 13.3% higher on Feb. 11.  However, the stock's upside momentum stalled near the round-number $60 region, home to the equity's 180-day moving average. Today's downside momentum, meanwhile, has so far been contained by NUVA's 80-day moving average.  

NUVA Chart March 12

Options bears are swarming the battered stock. So far, over 1,000 put contracts have crossed the tape -- roughly four times the average intraday volume and almost nine times the number of calls traded. Most of the action is transpiring at the March 60 put, with most contracts likely being sold to close as speculators take profits on NUVA's drop.

Bearishness surrounding the stock is nothing new, though. In the past 10 weeks, almost three NUVA puts have been bought to open for every call on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 97th percentile of its annual range, too, hinting at a much healthier-than-usual appetite for bearish bets of late. 

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