Will Sarepta reverse after steep drop?
Traders are betting on a rebound in Sarepta Therapeutics, which has lost two-thirds of its market value in the last month.
optionMONSTER's Heat Seeker market scanner shows that 4,800 March 16 calls were purchased for $1.90 to $2.10 this morning. Volume was more than 73 times open interest at the strike, which indicates new money was put to work.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Coaching section)
SRPT is down 1.06 percent to $12.10 today and has dropped 67 percent just in the last four weeks. The drug developer is expected to report earnings before the market opens on Feb. 25.
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