Call Traders Eye Biotech Stock's Big Drop

Immunomedics delayed its breast cancer drug application to the FDA

Managing Editor
Sep 30, 2019 at 11:56 AM
facebook X logo linkedin


One of the worst stocks on the Nasdaq today is Immunomedics, Inc. (NASDAQ:IMMU), after the company said it was delaying the submission of its application for Food and Drug Administration (FDA) approval of its breast cancer drug until late November or early December. IMMU is down 12.2% to trade at $12.50 at last check, on track for its fifth straight loss and worst single-session drop since Jan. 18. With the drug stock on the short-sale restricted (SSR) list today, IMMU options traders have been coming out in droves.

In just the first few hours of trading, already 4,000 options have changed hands, five times the average intraday volume and pacing for the 95th percentile of its annual range. Leading the charge is the January 2021 20-strike call, but there are also new positions being opened at the weekly 10/25 15-strike call.

For reference, IMMU hasn't traded at $20 since December 2018. It appears today's drop has run out of steam at the $12 level, an area that has contained pullbacks in the last year. During this time span though, the biotech stock has shed 40%.

Daily Stock Chart IMMU

The appetite for calls today echoes the recent trend. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day call/put volume ratio of 1.97 indicates calls outnumbered puts by a nearly 2-to-1 margin in the past two weeks. Given that 32.7% of IMMU's total available float is sold short, it's possible some of these calls could be shorts hedging against any additional upside.

Whatever the motive, now is an opportune time to speculate on IMMU's short-term trajectory with options. The stock's Schaeffer's Volatility Index (SVI) of 81% is in the 23rd percentile of its annual range, meaning short-term options on the security are relatively inexpensive at the moment, from a volatility standpoint.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI