Options Update
Spirit Airlines, Inc. SAVE
On Wednesday, we identified a pair of SAVE options contracts as potential swing-trade candidates, specifically referring to the January 15th $40 and $45 Calls, and over the course of the session and-a-half since then, they’ve made quite a bit of progress. From Wednesday’s lows to Thursday’s highs, we’ve already seen upswings of 48% in the $40’s (2.90-4.30) and 93% in the $45’s (.70-1.35).
With more than two weeks until their expiration and SAVE shares still trading in the appropriate range, we’ll continue to keep a lookout for possible swing-trade chances from this particular options idea.
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Celgene Corp. CELG
Despite the decreased activity during the short week prior to the holiday break, we managed to spot some nice intraday swings from CELG options. We were on the trail of CELG Weekly $116-120 Calls starting on Wednesday, and after providing multi-bag gain opportunities on that day, they continued to produce during Thursday’s short session.
The $119’s and $120 were both still close enough to the money to yield significant moves over the half-day with the $119’s surging 77% from 2.12-3.75, and $120’s making an impressive 204% run from .97-2.95.
Chimerix, Inc. CMRX
CMRX set off our cliff-diver alarms this morning after shares plummeted more than 75% in premarket trading based on the clinical failure of one of the company’s late-stage trial drugs.
Whenever we see something like this unfold, our immediate instinct is to wait for the dust to settle, then strike as the rebound occurs. Knee-jerk selloffs of this magnitude don’t come along every day, but when they have in the past, we’ve almost always seen some measure of a recovery.
We’ll place CMRX on watch for such an event, provided it can hold at or above the $7-level moving forward.
Patriot National, Inc. PN
PN is another stock that was recently hammered back, and its own recovery is already in effect. In addition to insider buying in recent months and coming off of recent lows on the chart, the company announced a significant share repurchase to the tune of $20M this morning (View PR) that will avoid dilution from a previously announced private placement. We’ll be monitoring the stock for the possibility of a protracted recovery as we kick another short trading week.
Extended Watchlist:
GEQU, USPR, LOGG, IFUE