Why Call Traders Should Consider Merck Stock

The equity sports strong year-to-date and year-over-year leads

Jun 28, 2022 at 10:20 AM
facebook twitter linkedin

Merck & Co., Inc.'s (NYSE:MRK) recent breakout above the $88 level took out both its 2021 and 2000 highs. Outperforming with 22.1% year-over-year and 21.6% year-to-date gains, MRK also provides a decent valuation with a forward price-earnings ratio of 12.   

MRK Chart June 28

There is still room for upgrades, too, with eight of the 16 analysts in coverage carrying a lukewarm "hold" rating. And while short interest is low, it's worth noting that it's risen 37.5% over the past month.
A shift of sentiment in the options pits could provide tailwinds as well. MRK's Schaeffer's put/call volume ratio (SOIR) of 0.78 ranks higher than 99% of readings from the past year. Echoing this, the equity's 10-day put/call volume ratio of 0.94 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 98% of readings from the past 12 months, showing puts being picked up at much faster-than-usual pace.
Furthermore, the security's Schaeffer's Volatility Scorecard (SVS) sits at a high 99 out of 100, meaning MRK has exceeded option traders' volatility expectations during the past year. Lastly, our recommended call has a leverage ratio of 7.6 and will double in a 12.6% pop in the underlying equity.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this MRK commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.



These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!


Common mistakes options traders make


Special Offers from Schaeffer's Trading Partners