Q2 STOCKS TO BUY

AZN Adds to Vaccine Buzz on New Study

There is plenty of pessimism amongst options traders

Deputy Editor
May 19, 2021 at 10:14 AM
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AstraZeneca PLC (NASDAQ:AZN) is in the spotlight today, after the Financial Times reported that the company's Covid-19 vaccine works well as a third booster shot, according to a study by Oxford University, the vaccine's co-developer. In other news, Taiwan is set to receive 400,000 doses of the vaccine by Wednesday. At last check, AZN was trading up just 0.1% at $56.05.

AZN has been rallying on the charts lately, now trading at its highest level since mid-November. The stock shot above a slew of long-term moving averages in late April, after its 30-day moving average swooped in to catch a steep pullback. Year-to-date, the equity is up 8.1%. 

Despite the recent price action, short interest has been building, up 19.8% during the last two reporting periods. The 118.09 shares sold short account for 4.5% of the stock's available float, and would take nearly 12 days to cover at AZN's average pace of trading.

Meanwhile, the options pits have been much more bearish than usual. This is per AstraZeneca stock's 10-day put/call volume ratio of 1.07 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 93% of readings from the past year, showing puts being picked up at a much faster-than-usual rate. 

That said, speculating on the security's next move with options could be a prudent play. The stock's Schaeffer's Volatility Index (SVI) of 21% stands higher than just 7% of all other readings in its annual range, implying that options players are pricing in low volatility expectations at the moment. 

 
 

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