Q2 STOCKS TO BUY

FDA Ruling Could Be Great News For BioMarin Pharmaceutical Options Traders

Call buying had been very popular on the biotech

May 25, 2018 at 9:55 AM
facebook X logo linkedin


Biotech stock BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is trading up 3.9% this morning at $91.74, after the Food and Drug Administration (FDA) approved its drug Palynziq for the treatment of phenylketonuria, a rare genetic disorder. A meaningful move above the $90 level would be big for BMRN, considering this area has acted as a stiff ceiling in recent weeks, and sits just above the year-to-date breakeven point. Options traders are hoping the breakout continues, too, as out-of-the-money calls had been popular in recent weeks.

Overall, 1,559 BioMarin calls were bought to open during the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), compared to just 68 puts. The most popular contract during that time, based on increases in open interest, was the June 95 call, where data shows mostly buy-to-open activity. The June 90 call saw notable buying activity, as well.

Looking back, BMRN has not been the best target for premium buyers, since its Schaeffer's Volatility Scorecard (SVS) is just 29 out of a possible 100. This show it's tended to make smaller-than-expected moves compared to what the options market has priced in over the past year.

Plus, some of this recent call activity could be from attributed to short sellers, who control almost 7% of the float. Specifically, these bears could have been buying the out-of-the-money calls to hedge against a sharp upside move from the biotech.

Analysts, on the other hand, are quite bullish. Eighteen of the 20 in coverage already had "buy" or "strong buy" ratings on BioMarin Pharmaceutical stock, and at least five price-target increases have come through since the FDA announcement. Even the lowest of these new price targets ($98 at RBC) represents a significant premium to the equity's current price, while the highest was $146 from Leerink -- calling for upside of almost 60%.

 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter