FDA Nods Fuel Unusual Options Volume on NBRV, MRNA

Biotech stocks NBRV and MRNA are seeing unusual call volume today

Aug 20, 2019 at 2:40 PM
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Biopharmaceutical stocks Nabriva Therapeutics PLC (NASDAQ:NBRV) and Moderna Inc (NASDAQ:MRNA) are seeing unusual options volume today, with the equities moving on Food and Drug Administration (FDA) news. Specifically, the FDA approved Nabriva's pneumonia antibiotic late yesterday, sending NBRV stock to a three-month high earlier. Meanwhile, Moderna's Zika virus vaccine received "fast track" status from the regulatory agency, sending MRNA shares higher.  

NBRV Options Traders Expect Stock to Take Out Resistance

Nabriva stock rallied as high as $2.77 earlier, into territory not charted since mid-May. Just yesterday, before the late-afternoon FDA news hit, NBRV traded as low as $1.66 -- marking its lowest point since January -- before paring its losses. As such, it's been a volatile couple of days for the equity, which has been bumping up against resistance in the $2.50 region -- home to its 100-day moving average. At last look, NBRV has trimmed today's gain to just 0.7% to trade at $2.22.

NBRV stock chart aug 20

Both Nabriva Therapeutics stock and options volume are pacing for an annual high today. So far, roughly 5,400 NBRV calls have changed hands -- 10 times the average intraday volume. Meanwhile, fewer than 350 puts have traded, though that's still 12 times the norm. Considering NBRV is a penny stock with limited downside potential, it's not absurd to find such a heavy skew toward call options.

Most active today is the September 2.50 call, with more than 2,600 contracts exchanged. New buyers of the call expect the drug stock to surge north of resistance at the $2.50 level by the time the options expire on Friday, Sept. 20.

MRNA Shorts Could Be Getting Spooked

Moderna stock was last seen 5.8% higher to trade at $14.17. The equity is now on pace to end atop its 30-day moving average for the first time since mid-May, back when MRNA was trading around $25. The shares have given up more than half their value since touching an all-time high of $29.79 in early April, and touched a record low of $11.54 on Aug. 7.

MRNA stock chart aug 20

MRNA has seen roughly 1,500 call options traded today -- three times the norm, and more than 10 times the number of puts exchanged. The October 15 and 22.50 calls are most popular, with buyers expecting the shares to top $15 and $22.50, respectively, by options expiration on Friday, Oct. 18.

However, considering the 22.50-strike calls are so far out of the money, it's possible short sellers are buying the options as a hedge. Short interest on MRNA surged 20.6% in the past two reporting periods, and now represents more than eight sessions' worth of buying power, at the equity's average pace of trading.

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