Heron Therapeutics, Inc. HRTX
During premarket trading on Wednesday, we spotted a unique opportunity in HRTX, which was in the process of surging on news of some positive Phase II study results. We pointed out that despite the excitement and subsequent knee-jerk reaction tied to the announcement, the chart had been looking bearish and “ripe for further losses” leading up to that point.
That’s what caused us to formulate an idea for the HRTX Weekly $45 and $42.50 Puts for when the stock began to pull back off of its hype-driven spike, and the ensuing chain of events followed our expectations to the letter.
From Wednesday’s high of 42.25, the stock tumbled back to a low of 35.12 during yesterday’s trading, and in the process the contracts we were monitoring put on quite a session-over-session performance. Over that short span, the $45 Puts traded in a range from 6.50-9.20 for a 42% move, while the $42.50’s made a slightly bigger move from 4.10-7.20 for gains of up to 76%
Boreal Water Collection, Inc. BRWC
BRWC was a mention in yesterday’s morning report, and the stock made a noteworthy intraday spike of 33% from a low of .0009 to .0012.
From the look of the chart, for us to remain interested, we’d need BRWC to maintain support above the current 50DMA of .0008 on any pullbacks and test its previous swing high of .0013. Beyond that point, there isn’t much in the way of resistance on up to the .0018-level.
Sientra, Inc. SIEN
We’re looking at SIEN as a potential recovery-play after news of a securities fraud investigation absolutely pushed the stock off of a cliff from the $20-level down to a new 52-week low at 9.38 yesterday. Even with the caveat of a pending investigation, we’re always looking at the possibility of snapping up highly-discounted shares when a stock tumbles so dramatically on events where no material changes in the company have taken place.
Already in the premarket we’re seeing a bit of a course-correction from SIEN as it has made its way back to the $11-mark. We’ll keep a continuous eye on this stock in coming sessions for the possibility of a rebound, and keep a lookout for any further updates regarding the accusations levied against Sientra.
Markets Gapping Up – Options Ideas
After taking a beating for the majority of the week leading into a late-day rally yesterday, the overall markets as a whole are gapping up early this morning, and we’d like to float a set of corresponding options ideas if the trend carries the way we suspect it might.
We’re going to be looking for some dip-and-rip action, and in doing so, have our sights focused on Weekly Calls* in both the SPY and AAPL chains. In particular, we’re zeroing in on SPY Weekly $193-194.50 Calls, and AAPL Weekly $115 and $116 Calls.
*Just to reiterate what we’ve said in the past- trading options with a weekly expiration on a Friday carries an inherently elevated risk-reward factor, and is certainly not for the faint-of-heart, or beginning traders.
Extended Watchlist:
PCSV, THCZ, QLTS, CHIT