JNJ Drama Drives Option Bulls to Sector Peer

The stock just broke past recent pressure at its 40-day moving average

Deputy Editor
Apr 13, 2021 at 3:27 PM
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The news that Johnson & Johnson (JNJ) has been forced to pause its Covid-19 vaccine rollout is giving several other vaccine frontrunners a boost in today's  trading. The shares of Moderna Inc (NASDAQ:MRNA), specifically, were last seen up 4.9% to trade at $146.86 -- on track for their highest close in nearly a month. 

MRNA has seen a choppy six months on the charts, though long-term support at the security's 140-day moving average helped keep some of its latest pullback in check. Today's pop has the stock breaking north of its 40-day moving average, however, which put pressure on MRNA during its past two sessions. For the year, the equity is up 40.8%. 

MRNA April 13

Option bulls are coming out of the woodwork today in response to the positive price action. So far, 45,000 calls have been exchanged -- double the intraday average -- compared to 19,000 puts. Most popular are the April 150- and 160-strike calls, and it  appears positions are being sold to open at the latter. This implies these traders are speculating on the $160 mark as a ceiling for the underlying stock up until these contracts expire this  Friday. 

MRNA options are still quite affordable, for anyone looking to get in on the pharmaceutical name's next move. The equity's Schaeffer's Volatility Index (SVI) of 62% stands higher than just 9% of readings from the past year. This means these traders are pricing in relatively low volatility expectations at the moment. What's more, the stock's  Schaeffer's Volatility Scorecard (SVS) sits at a high 92 out of  a possible 100. This  means MRNA has tended to exceed these expectations during the past 12 months. 

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