Dova Pharmaceuticals Options Red-Hot During Breakout Session

DOVA shareholders may be initiating an options hedge today

Jun 27, 2019 at 3:07 PM
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It's a breakout session for Dova Pharmaceuticals Inc (NASDAQ:DOVA), after the Food and Drug Administration (FDA) approved the company's blood disorder drug, Doptelet. At last check, DOVA shares were up 22% at $13.01 -- near the top of the Nasdaq, and pacing for their best day ever -- and options traders are rushing the pharma stock.

Most recently, 3,000 calls and 1,100 puts have changed hands on DOVA -- nine times what's typically seen at this point, and volume pacing in the 99th annual percentile. The July 10 call is most active, and it looks like speculators may be liquidating positions amid today's massive pop.

Elsewhere, speculators appear to be purchasing new positions at the July 12.50 put. If this is the case, put buyers expect DOVA to retreat back below the strike price over the next few weeks. This could also be indicative of shareholders protecting paper profits with an options hedge.

Looking at the charts, Dova Pharmaceuticals has been edging higher since its Dec. 20 record low of $5.62. Today's surge puts the stock on track for its first close above the 200-day moving average since last July, though it's running out of steam near a Dec. 17 bear gap. Nevertheless, DOVA stock is now poised for a 48% June gain, which will mark its best monthly return since its public trading debut two years ago.

dova stock daily price chart june 27


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