Sangamo Therapeutics Bull Gap Fuels Hot Options Trading

Positive gene therapy trial data is fueling a big session for SGMO stock

Apr 2, 2019 at 12:43 PM
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The shares of Sangamo Therapeutics Inc (NASDAQ:SGMO) are on fire, after the California-based biotech reported positive data in a phase 1/2 study for its gene therapy hemophilia treatment that's being developed with Pfizer (PFE). The company also unveiled upbeat data for an early stage study for a gene therapy being developed with Sanofi (SNY).

In reaction, SGMO stock is trading up 28.2% at $12.22, pacing for its best day since May 11, 2017, when it gained 60.9%. Options traders are in overdrive, too, with 9,875 calls and 4,811 puts on the tape so far -- 14 times what's typically seen at this point. The April 10 call is most active, but it looks like speculators may be taking profits on the now in-the-money options.

Elsewhere, new positions are being initiated at the April 15 call, though there appears to be some sell-to-open activity occurring. If this is the case, call writers expect $15 to serve as a short-term ceiling through front-month options expiration at the close on Thursday, April 18.

Short sellers are likely feeling the heat right now. The 13.6 million SGMO shares currently sold short represents 13.4% of the stock's available float, or 5.3 times the average daily pace of trading. As such, some of today's upside could be part of a short squeeze.

Heading into today's trading, Sangamo Therapeutics stock had been chopping lower over the past 12 months, with its 200-day moving average keeping a tight lid on the equity. This trendline is rearing its ugly head as resistance today, too, with the shares last seen trading below it after a brief pop above it for the first time since early September.

sgmo stock daily chart april 2

 

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