Everyone seems to have a strategy when it comes to buying cheap stocks. It may be to find the direction of the wind or to see if a solar eclipse is approaching. Kidding aside, there are some pretty unique “strategies” marketers use to build their watchlist. From a more technical perspective, data is a huge asset for some. Everything from penny stocks with high volume to stocks with insider buying are in the mix. You also have more sentiment-based strategies used by speculative investors and traders. Everyone wants to know how to identify an early trend, and different data sets are used to achieve this.
Today we take a look at a few penny stocks to watch based on unusual options activity. Why is it important? Those who subscribe to this idea are looking for “big bets” made in the options market. If you are new to options, you can check out Trading Options 101: A Beginner’s Guide. Options are a means of hedging and, like penny stocks, a means of taking advantage of lower amounts of capital for an opportunity for increased gains.
At the very least, traders will use unusual or irregular activity to make an educated guess about future trends for specific stocks. They will also watch for interesting activities that sometimes come to light before important company events. Ultimately, it’s more data to formulate an investment thesis. Today we take a look at 3 penny stocks that have seen unusual activity in the stock market today.
Penny Stocks to buy?
Pear Therapeutics Inc. (NASDAQ: PEAR)
It may not look the case on the 6-month chart, but PEAR stock has seen some bullish momentum. The past few days, in particular, have seen stocks rise from below $2.20 to above $4 this week. Pear Therapeutics specializes in “software” drugs. Prescription Digital Therapies or “PDTs” are designed by the company and indicated for Opioid Use Disorder (reSET-O), Substance Use Disorder (reSET) and Chronic Insomnia (Somryst).
Analysts from Chardan Research and Citigroup recently adjusted the share price targets. Both have buy ratings on the stock with targets between $11 and $13. The changes came after the company’s recent earnings slump in May. Additionally, Pear announced another milestone this week. The study data revealed some interesting findings regarding the reSET-O platform. FDA-cleared PDT has been shown to reach patients in a wide range of geographies and has suggested that PDTs could enable broad access to address health equity.
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Yuri Maricich, MD, MBA, Chief Medical Officer, Pear Therapeutics, “These results suggest that reSET-O may enable access to behavioral treatments for OUD across all geographies, which may help ensure equity in health for those seeking recovery.”
Unusual PEAR options activity today
Although PEAR stock options aren’t as active as other companies like Apple (NASDAQ:AAPL) or Amazon (NASDAQ:AMZN), there is some interesting activity. In particular, we looked at the options chain and found that the August 19 $5 calls had 0 open interest, but over 2,800 contracts traded today.
Catalyst Biosciences Inc. (NASDAQ: CBIO)
Catalyst Biosciences shares have already been on the move this week. Yesterday we discussed the company on a list of sub-$1 penny stocks to watch this week. Although CBIO stock has broken through that $1 threshold, it remains a focus for the trading community.
This week, the biopharmaceutical company announced that it has sold its portfolio of protease drugs, including its CB 2782-PEG platform, to Vertex Pharmaceuticals (NASDAQ: VRTX). The news of a sell off is great, but the price is making traders react. Catalyst’s deal was for $60 million in cash. The company has explored strategic alternatives to enhance shareholder value and this latest transaction brings in additional capital.
This was something echoed again by the company’s CEO who said, Nassim Usman, Ph.D., “We explored strategic alternatives to monetize our assets and maximize value for our shareholders. This sale is part of the ongoing strategic process we announced in February to explore alternatives and create shareholder value.
CBIO Unusual options activity today
A few thousand Open Interest contracts are spread over all the options chains. However, today we looked at calls from June 17, 2022. In particular, the $2.50 strike showed the most volume with over 2,700 contracts. This compares to more than 6,100 open interest contracts.
Endeavor Silver Corporation (NYSE:EXK)
Precious metal prices have experienced high volatility. Being one of them, Silver wasn’t immune to that either. Over the past few days, companies including Endeavor Silver have had an excellent rebound, with stocks rebounding around 20%.
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Earlier this month, Endeavor announced that it was on track to meet its 2022 production guidance. “Our first quarter performance was strong, putting us on track to meet our production guidance for 2022,” Dan Dickson, CEO of Endeavor Silver, said in a May update. “High-grade ore at Guanacevi has been a driving force and is expected to continue throughout the year, while production at Bolanitos remains strong. Industry-wide inflation is a growing challenge and we continue to seek ways to mitigate its negative impact.
Looking ahead to the second quarter, we are targeting two major milestones: securing debt financing for Terronera and closing the Pitarrilla transaction. This acquisition, which is fully funded, is expected to close this quarter after receiving approval from the Mexican Federal Economic Competition Commission. Following the closing of the agreement, drilling will commence to verify historical data from Pitarrilla and update historical resources. This will become a key objective for us for the rest of 2022.
With this impending acquisition and a rebound in the metals, EXK stocks and others are back in focus.
Unusual EXK options activity today
The option string for EXK may be a bit more interesting for some readers. That’s because you need to be careful of call options expiring in 2024. The $10 strike calls on January 19, 2024 saw over 1,500 contracts trade for just 480 of open interest at the time of this article.
Penny Stocks to Watch with Unusual Options Volume
Thanks to the stock market crash of 2022, volatility is at the forefront. It is important to know that trends can change quickly. In the case of penny stocks, speculative trading could amplify specific trends. If you’re looking for unusual option volume today and don’t have access to unusual option activity alerts or an unusual option activity scanner, we hope to offer you some insight with updates. updated like this. Make sure you’ve also considered other trends that could impact specific businesses. For now, these are just a few of the most popular penny stocks today that have also seen an increase in options activity.
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