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European Pause on AstraZeneca Vaccine Sends Stock Lower

Option bears have been upping the ante of late

Digital Content Manager
Mar 11, 2021 at 10:33 AM
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The shares of AstraZeneca PLC (NASDAQ:AZN) are down 1.7% to trade at $48.95 this morning, following news that Italy banned the drugmaker's Covid-19 vaccine after two recently inoculated men died in Sicily. AIFA, the country's medicines authority, said the ban was "precautionary," and that there has not been an established connection between the vaccine and the deaths. Meanwhile, Denmark and Norway have also paused the use of AZN's vaccine, after several cases of blood clots were reported. 

AZN has been chopping lower since its mid-July surge, and is now sitting just below its year-to-date breakeven. While it still stands much higher than its March 2020 dip to the $36 level, several layers of resistance are still acting as pressure on the charts. Most recently, the 60-day moving average thwarted AZN's attempt at a rebound during yesterday's trading. 

Analysts are still optimistic toward AZN, with all but one of the seven in coverage calling it a "strong buy." Plus, the 12-month consensus price target of $62.35 is a 27.2% premium to current levels. 

Option traders, meanwhile, are starting to change their tune. While calls are still outnumbering puts on an overall basis, the security's 10-day put/call volume ratio stands higher than 94% of all other readings at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This means puts are being picked up at a much quicker-than-usual clip of late. 

This uptick in bearish options activity is echoed in today's trading, with puts running at double the intraday average. So far, 1,352 puts and 1,826 calls have been exchanged. It looks like the March 57.50 call and the April 50 are seeing the most attention, while the March 47.50 put is also popular. 

 

 

 

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