Sarah Wasserman (swasserman@sir-inc.com) Biopharmaceutical issue VIVUS, Inc. (VVUS) has seen a surge in put volume today, with roughly 5,500 of these bearishly oriented options crossing the tape -- triple the stock's expected single-session put volume.
Upon closer inspection, it appears that one option player is responsible for the bulk of today's put volume. Early this morning, 3,000 February 8 puts changed hands at the ask price, suggesting that they were likely purchased. With just 2,000 contracts currently open at this strike, it appears that new positions are being added here today. By buying to open VVUS' February 8 put, this option player is expecting the stock to backpedal beneath the $8 level over the next two months.
By and large, traders maintain a skeptical outlook on VVUS. The equity's Schaeffer's put/call open interest ratio (SOIR) of 0.69 ranks in the 92nd annual percentile, revealing that short-term option players have been more bearishly aligned just 8% of the time during the past 12 months.
Elsewhere, short interest on VVUS surged by nearly 14% during the most recent reporting period, and now accounts for 20.1% of the equity's total available float.
From a technical perspective, the pessimism levied toward VVUS is a bit surprising. The stock rallied in December on news that an FDA panel had recommended approval for Contrave, Orexigen Therapeutics' (OREX) new diet drug. Since then, VVUS has been hovering in the $9 to $10 neighborhood. During this time, the stock's 10-day moving average has moved in to meet up with the shares, and could provide a springboard to launch VVUS on the next leg of its uptrend.
