Top Penny Stocks To Buy According To Interesting Options Data Today
If you’ve traded penny stocks for a while, you might have heard the term “whale” mentioned before. This refers to large-dollar trades made by either institutions or investors with deep pockets. Whether it’s insiders picking up shares of their companies or funding seemingly loading up on cheap stocks, the “follow the money” approach to trading is alive and well. Today, we look at a handful of penny stocks with unusually bullish options activity. Whether the “whales” are right about these stocks is to be seen. But, for now, you’ll at least be able to see some of the undertones, speculation, and sentiment in the stock market today.
Penny Stocks With Unusual Options Activity
- Sundial Growers Inc. (NASDAQ: SNDL)
- Clever Leaves Holdings Inc. (NASDAQ: CLVR)
- Camber Energy Inc. (NYSE: CEI)
- Vinco Ventures Inc. (NASDAQ: BBIG)
- MEI Pharma Inc. (NASDAQ: MEIP)
Best Penny Stocks To Buy
It’s important to remember that just because “big bets” are being placed, that doesn’t mean an underlying bullish or bearish trend is guaranteed. In many cases, these bets are precisely that; bets. When it comes to gauging the options market, Basic Call buying or Put buying gives traders the right but not the obligation to buy or sell shares of the companies. If you’re new to options, you can also get some basic understanding by reading the article: Trading Options 101: A Beginner’s Guide. Today we look at a few hot stocks to buy according to bullish trades in the options market.
Sundial Growers Inc. (NASDAQ: SNDL)
Marijuana stocks are in a very bright spotlight this week. That’s because of a House panel hearing on a federal legalization bill, better known as the MORE Act. The Act addresses the many nuances of legalization, including taxes and fairness of social policy. Thanks to this pending legalization update, cannabis companies are gaining steam. Sundial Growers has seen some of the most options activity over the last week.
While no significant updates have been released, there is a big event in the spotlight. That event is the planned merger deal with Alcanna Inc. An original October agreement was Amended to improve specific considerations for the agreement. Though it was supposed to close earlier this year, an extension puts this week the official week that the deal’s extension expires.
What are whales doing with SNDL? Looking at the options chain for SNDL stock, you can see a significant amount of open interest in SNDL calls through April 14th. The heaviest volume as of this article is in the April 1st (this week) $1 calls. Meanwhile, the highest open interest contract is the April 14th $1 strike calls. With bets being placed on a seemingly bullish outcome to this week’s cannabis vote, attention has turned to marijuana penny stocks like SNDL.
Clever Leaves Holdings Inc. (NASDAQ: CLVR)
Continuing this trend in marijuana stocks. Clever Leaves has also gained the hearts of retail traders over the last week. Since we first mentioned it on March 24, the pot penny stock has rallied as much as 150% during the short period. While speculation has played a role, company updates have also helped fuel momentum.
Last week the company reported its latest round of earnings and reiterated previously provided 2022 guidance. Full-year revenue was up 25% from the previous year as the company emphasized its focus on commercial progress in core markets. “With our continued production efficiencies in Colombia and the learnings we’ve gained from our flower operations in Portugal, we believe we are well-positioned for this expanded market opportunity. Once the guidelines are issued from the Colombian authority for the commercial export of dried flower, we expect to begin the export of dried flower in the fourth quarter of 2022,” explained Andres Fajardo, President and incoming CEO of Clever Leaves.
Whale bets aren’t as hefty with CLVR as with SNDL stock. There are a few key levels to focus on right now. As far as the highest volume for the day, the CLVR April 14th $2.50 and $5 Calls are the most active. Meanwhile, the vast majority of open interest sits with the April 14th, $5 Call contracts. Something of note that may or may not be of interest is the company’s January 20, 2023 (yes, next year) Call options contracts. I’ve included them in the image below. You’ll see a much higher level of open interest spread across multiple strike prices than Put data.
Camber Energy Inc. (NYSE: CEI)
Energy penny stocks have been in focus for a while now. Keeping in mind is that much of the momentum has stemmed from the ongoing conflict between Russia & Ukraine. Regardless, it has helped put focus on countless energy companies this month.
Camber is one of the popular meme stocks of the category that has remained a focus of the retail crowd. Though not much has come from the company in terms of news, Camber has focused on its cash flow. Earlier this year, Camber closed a $100 million equity transaction, which, according to the company, will be used for new acquisitions and “value-added initiatives” this year.
While there is a significant amount of options volume in this week’s $1 Call options, the April 14th expiration appears to have gained the market’s interest. Call contracts ranging from the $1 strike up through the $6 strike account for more than 70,000 contacts of open interest.
Vinco Ventures Inc. (NASDAQ: BBIG)
Another one of the popular penny stocks on Reddit and Twitter is Vinco Ventures. If you’re unfamiliar with the recent events boosting interest in BBIG stock, they involve several significant trends that have captivated investor attention in 2022. An app competing with TikTok, virtual events, and NFTs are all part of the story. Lately, however, the focus has been on a proposed spin-off of a cryptocurrency venture. There has been a planned spin-off of its Cryptyde subsidiary for months. Earlier this year, the digital currency company also entered into a capital raise of $42 million to be utilized after the expected deal.
President and Chief Executive Officer of Cryptyde, Inc., Brian McFadden, explained, “We are focused on executing on our vision to become a leader in the blockchain and web3 space. We are actively pursuing growth opportunities and looking to collaborate with partners who can enhance our future offerings while striving to develop a world-class organization for our stakeholders.”
BBIG stock has been on the radar for short squeeze data in addition to unusual options flow for the last few weeks. Vinco’s April 1 and April 14 contracts have gained attention. The highest open interest is with the April 14th $5 Calls, while the highest volume for the day is in the $3.5 Call contracts expiring this week.
MEI Pharma Inc. (NASDAQ: MEIP)
The regular pullback in biotech stocks hasn’t been as hefty as in previous sessions, even with the stock market down today. With that, traders have searched for plenty of additional opportunities in cheap stocks. MEI Pharma came under pressure last week following a regulatory update following a meeting with the FDA. MEI and Kyowa Kirin discussed the FDA’s request that a randomized trial is now needed with its zandelisab drug candidate. to “adequately assess” the efficacy and safety of the drug. As a result, the companies paused efforts on filing for an FDA marketing application.
Fast-forward to this week, and MEIP stock has managed to rally back a bit. Even in light of these developments, analysts still hold price targets much higher, despite some cutting their targets. Brookline Capital adjusted its target to $15 from $20 and maintained a Buy rating. BTIG changed its target to $4 from $11 but reiterated a Buy. The new price targets remain at least 500% higher based on current levels in either case. There’s also an upcoming ODAC meeting scheduled for April 21 to discuss whether randomized data should be required to demonstrate efficacy and safety evidence.
Where is the MEIP options activity right now? Looking at the September contracts, you will see that today’s volume in the $2.50 Call contracts expiring September 16th has nearly twice the amount as current open interest. You can also see the highest current open interest in the June 17th $5 Call contracts.
Should You Trade Penny Stocks Right Now?
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