Portola Pharmaceuticals Slump Ignites Heavy Call Trading

The stock just hit a record low earlier today

Jan 10, 2020 at 3:19 PM
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Portola Pharmaceuticals Inc (NASDAQ:PTLA) stock is at the bottom of the Nasdaq today, down after the drugmaker issued preliminary earnings for the fourth quarter and 2019. PTLA said it expects global and U.S. revenue from Andexxa -- its reversal treatment for uncontrolled bleeding -- to fall well below consensus estimates.

A round of bear notes is only pouring salt on the proverbial wound, with Oppenheimer downgrading the stock to "perform" from "outperform," and slashing its price target to $17 from $40. Cowen and Company followed suit with a price-target cut to $35 from $45, expressing concern over this decreased Andrexxa use. Credit Suisse also lowered its PTLA target price, to $18 from $35.

Meanwhile, volume has ramped up in Portola Pharmaceuticals options pits. With about an hour left in today's trading, more than 14,400 calls and 3,000 puts have changed hands -- 17 times what's typically seen at this point, and volume almost doubling the previous peak for a single session of 9,181 contracts traded on May 8. The February 12.50 call is most active, and it looks like one speculator may be rolling their February 22.50 calls down.

Widening the scope reveals a distinctly bullish bias among PTLA options traders in recent weeks. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open 3,454 calls in the past two weeks, compared to just 38 puts. The resultant call/put volume ratio of 90.89 ranks in the 95th annual percentile, meaning this rate of call buying relative to put buying is unusual.

Looking at the charts, PTLA stock was last seen down 41.1% to trade at $14.57, pacing for its biggest one-day drop on record. The shares earlier hit a record low of $13.50, and have now shed more than 58% in the last nine months.

ptla stock daily price chart jan 10


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