If you look at some of the largest percentage gainers on any given day, you might realize there are biotechs popping off.
Right now, biotech companies are racing for the cure and vaccine for the coronavirus… and it seems as if there are catalyst events frequently.
Now, the “smart money” has been jumping into options plays on some of these names — hoping to cash in when a catalyst hits — in my opinion.
Before I show you the interesting options activity I noticed in BCRX and my thoughts on the trade, I want to reveal how my Dollar Ace Scanner works.
The “Smart Money” Is Throwing Down Some Interesting Bets In The Biotech Space
The other day, I actually noticed some bullish options activity in Inovio pharmaceuticals (INO).
On Friday, I noticed 1979 INO May 22 $14 Calls were purchased for $0.80.
Not a crazy trade, so I actually put it on my watchlist and sent it to subscribers on Monday in the pre-market. Of course, I was keeping a close eye on it because there was positive news in the biotech sector that day.
So shortly after the market open at 10:28 AM ET on Monday, I sent this out to Dollar Ace subscribers:
Guess what happened?
INO caught a pop and I sold half of my calls for a 108% win!
I held those options overnight from Monday, heading into Tuesday, and the stock didn’t have any follow-through… so I decided to sell the rest yesterday morning for a 40% win on the last half.
I’m a little mad I didn’t keep some on because INO opened at $16.59 on Wednesday, after the company released early data testing results for its coronavirus vaccine.
Those options exploded, but I’m not too mad because my Dollar Ace Scanner actually detected another interesting biotech play yesterday.
Is BCRX The Next Biotech To Run Up?
One biotech stock that I want to keep an eye on is BioCryst Pharmaceuticals (BCRX)
Bought 1521 BCRX Jul20 $6 Calls for $0.74
The total premium on the trade was $113K.
Now, what was really strange was how they purchased these options. Rather than trying to get a better price and working the options order…
This “smart money” trader paid up big time to get their hands on these calls.
At the time of the trade, the spread was $0.51 X $0.74.
They lifted the offer and paid the max amount to scoop the calls. In other words, they paid $0.74, when they could’ve tried to get filled somewhere in between, or even at the bid.
What’s even crazier is the move they need to see just to break even.
They Need The Stock To Rise By More Than 30% In Less Than Two Months
Now, on an average day, BCRX will see around 5,900 options trade.
But on Tuesday, within the first 45 minutes of trading, there were already 6,490 contracts traded.
Is this the next biotech stock to rage?
We’ll just have to wait and see.
I’m keeping a close eye on this name right now.
Now, if you want to learn more about how my scanner works, then you may want to check out my training workshop — in it, I detail how I use my scanner to detect “smart money” activity.