LXRX Options Trading Takes Off During Stock Surge

Call buying has been popular in the last 10 days

Sep 18, 2019 at 2:48 PM
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Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX) is continuing its recent rally up the charts, last seen up 21% at $3.56, and options trading has picked up. More than 5,000 calls have traded, over five times the daily average of 821, and new positions are opening at the September 4 call. In the October series, the 3-strike put is popular, and the October 4 call could be seeing opening activity, too.

Overall, options volume is pacing for the 100th annual percentile, and the heavy call trading in particular is nothing new, since call open interest is in the 99th annual percentile. In just the last 10 days at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), more than seven calls were bought to open for every put.

Today would be the security's seventh up day in the past eight sessions, putting it on pace for a second straight close above the 50-day moving average. This technical strength could be pressuring short sellers, who increased their positions by 4.7% in the last two reporting periods, putting 7.8% of the total float in their hands. It would take these bears more than a week to cover their positions, based on average trading volumes.

And while the stock is still down roughly 67% in the past year, the majority of covering analysts have "strong buy" ratings in place. What's more, the average 12-month price target is up at $8.

lxrx stock sept 18

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