Wednesday, February 5, 2014

Mast Therapeutics (MSTX) - Huge Call Option Buyers in Tiny Bio-tech; A Signal or Just Noise? You Decide.

MSTX is trading $0.82, down 5.8%. The Symbol Summary is included below.

Provided by Livevol

Mast Therapeutics, Inc., formerly ADVENTRX Pharmaceuticals, Inc., is a development-stage company biopharmaceutical company focused on developing product candidates. The Company's product candidate is ANX-188, a rheologic, antithrombotic and cytoprotective agent that improves microvascular blood flow and has application in treating a range of diseases and conditions, such as complications arising from sickle cell disease.

This is an order flow note on a penny bio-tech with 13 employees and a grand total of $0 (zero) of revenue.  So, why the note?... Here's why...

First, let's start with the Stats Tab, below.

Provided by Livevol

I simply want to point out (1) that the average daily option volume over the last three months is ~1,000 calls per day and (2) that the current open interest (OI) is ridiculously tilted to the call side.

So, let's see why by looking to the Options Tab.

Provided by Livevol

Check out the OI in the Jul $1 strike calls, it's 21,140.  I have included the chart of OI in those calls.

Provided by Livevol

We can see that on 1-13-2014 the OI was ~1,500 and then exploded up over 8,000.  It has continued to rise, so, the vast majority of the OI has been accumulated in the last three weeks.  I have included the trade data from 1-13-2014 as an example of the trades getting executed.

Provided by Livevol

The bottom line is this is a zero $ revenue firm, a stock price that is itself an option, and now we see rather large interest in the calls in July.  I do note that the OI in the Apr $1 calls actually looks short... which is odd...

In any case, this is pure gamble to any of us outsiders that chose to participate, and the gamble is that someone who is an "insider" has shown their hand.  As for me, I will dabble b/c I can't help myself, but this does occur in bio-techs and quite often it's much a do about nothing... time and money lost.

But then again... sometimes it isn't...

This is trade analysis, not a recommendation.

Legal Stuff:
Options involve risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade options, and must meet suitability requirements.

The information contained on this site is provided for general informational purposes, as a convenience to the readers. The materials are not a substitute for obtaining professional advice from a qualified person, firm or corporation. Consult the appropriate professional advisor for more complete and current information. I am not engaged in rendering any legal or professional services by placing these general informational materials on this website.

I specifically disclaim any liability, whether based in contract, tort, strict liability or otherwise, for any direct, indirect, incidental, consequential, or special damages arising out of or in any way connected with access to or use of the site, even if I have been advised of the possibility of such damages, including liability in connection with mistakes or omissions in, or delays in transmission of, information to or from the user, interruptions in telecommunications connections to the site or viruses.

I make no representations or warranties about the accuracy or completeness of the information contained on this website. Any links provided to other server sites are offered as a matter of convenience and in no way are meant to imply that I endorse, sponsor, promote or am affiliated with the owners of or participants in those sites, or endorse any information contained on those sites, unless expressly stated.

No comments:

Post a Comment