Both ANAB and DERM are seeing heightened options activity
The U.S. stock market is drifting lower to end the week, as Wall Street waits in limbo for any U.S.-China trade developments. Two stocks stocks making vastly different moves today are skin disease specialists AnaptysBio Inc (NASDAQ:ANAB) and Dermira Inc (NASDAQ:DERM). Here's a quick look at what's moving the shares of ANAB and DERM.
ANAB In Nasdaq Cellar After "Surprising" Eczema Drug Failure
AnaptysBio stock is down 70.6% at $10.62 at last check, after etokimab, the company's eczema drug, failed the main goal for its late-stage trial. Three brokerages promptly issued downgrades, Jefferies, who also slashed its price target to $12 from $120. RBC was "surprised" by the failure, and called out AnaptysBio for a lack of investor call for such an important event. ANAB earlier hit a record low of $10, and is on track for its worst day ever by a wide margin.
Options volume is usually light, but it's roared to life today. More than 2,700 calls have changed hands today, 20 times the average intraday amount and 31 times the number of puts traded. Leading the charge is the December 17.50 call, where new positions are being opened and sell-to-open activity detected.
DERM The Benefactor From Etokimab Failure
On the other end of the spectrum, Dermira stock is up 21.5% to trade at $8.46, as AnaptysBio's eczema drug failures opens the door for Dermira's own treatment, lebrikizumab. Leerink says the etokimab failure removes "a major investor overhang." Derm is new eyeing its highest close in over a month.
There's similar frenetic activity in DERM's normally quiet options pits. Nearly 2,000 calls have changed hands, six times the average intraday amount and volume pacing for the 97th percentile of its annual range. Leading the charge is the November 8 call, but there are also new positions being opened at the November 10 call.
Now seems to be an affordable time for near-term traders to jump on Dermira stock with options. The stock's Schaeffer's Volatility Index (SVI) of 74% ranks in the low 8th percentile of its annual range, indicating low volatility expectations are being priced into short-term contracts.