Tuesday, March 18, 2014

Idera Pharma (IDRA) - Baby Pharma Rips 1000%; Huge "3-day" Bets Placed in Option Market

IDRA is trading $6.75, up 11.4% small with IV30™ up 5.8%. The Symbol Summary is included below.

Provided by Livevol

Idera Pharmaceuticals, Inc. is a clinical-stage biotechnology company engaged in the discovery and development of novel synthetic deoxyribonucleic acid (DNA) - and ribonucleic acid (RNA) - based drug candidates.

This is a volatility, order flow and stock note.  IDRA caught my eye first because of its intra-day move. Check out the tick chart, below.

Provided by Livevol

We can see that at right about 10am EST the stock launched up and has continued to do so.  What's going on?... I dunno, but the next thing that caught my eye was the order flow.

Let's turn to the Stats Tab, below.

Provided by Livevol

We can see that over 6,000 calls have already traded on a total daily average of just 684.  So, we're looking to be at ~10x daily order flow in about 30 min.

Next, let's turn to the Options Tab to see where the order flow is focused and to look at the volatility.

Provided by Livevol

Check out those Mar $7.5 strike calls.  3,709 have traded on an existing OI of 4,861.  My best guess is that the trades today are purchases, and the existing OI is also long.  The order flow in this one isn't obvious but the rising stock and rising volatility are circumstantial evidence of both conclusions above.

Now look at the top of the Options Tab and note the vols by expiry.  Mar is quoting ~245% and Apr is quoting ~180%.  So, there does seem to be some event due out basically... now?...

Finally, if we look to the stock chart, we'll see where the excitement is coming from (and why it may or may not be founded in reality).

Provided by Livevol

IDRA is up more than 1,000% in the last year and has a 52 wk low of $0.43.  It's an 18 person biotech with revenue of ~$50K and a market cap of $550 million (over half a billion).  The current revenue of course means nothing, it's all about future free cashflows and its rather apparent that some news or decision or result is due out very shortly that might paint a clearer picture of that  future.  In the meantime, it appears that someone is betting on "bright" and in the next three days.

Check that OI tomorrow -- if it's up, then this is a double down on that bet.  If the OI dips, it's a closing purchase.

This is trade analysis, not a recommendation.

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