Options traders are blasting RETA today
The shares of Reata Pharmaceuticals Inc (NASDAQ:RETA) are up 178.5% at $86.81 this afternoon, after U.S. Food and Drug Administration (FDA) approved the drugmaker's Skyclarys treatment for Friedreich's ataxia, a rare genetic disorder. No fewer than eight analysts hiked their price targets in response, with Guggenheim lifting its objective to $130 from $75.
Overall options volume is running at seven times the intraday average so far today, with 17,000 calls and 53,000 puts exchanged. Most popular is the March 75 put, where new positions are being opened.
Short-term options traders have been much more pessimistic than usual. This is per Reata Pharmaceuticals stock's Schaeffer's put/call open interest ratio (SOIR) of 1.89, which ranks in the 90th annual percentile, suggesting these traders have rarely been more put-biased.
Short interest is on the rise, too, up 8.6% over the last two reporting periods. The 8.83 million shares sold short account for a whopping 28.7% of the stock's available float, or nearly two weeks' worth of pent-up buying power.
The stock earlier today surged to a one-year high of $90, breaking through recent overhead pressure around $50. RETA has added an 262.9% in the last nine months, with the 200-day moving average acting mostly as support since October.
