When it comes to unusual options activity, Reddit, Twitter, and even stock market chat rooms seem to love this data. There are unusual options activity scanners that you can use to find stocks with irregular volume in their options chains. There are also websites like ours that scour through thousands of stocks to find irregularities.
If you’re wondering how to find unusual options activity, the first step is knowing where to look. Lucky for you, we’ve done extra leg work and found unusual activity today in a few penny stocks.
Penny Stocks To Buy?
- Atai Life Sciences (NASDAQ: ATAI)
- MannKind Corporation (NASDAQ: MNKD)
- AgriFORCE Growing Systems Ltd. (NASDAQ: AGRI)
Does Unusual Options Activity Matter?
According to some investors, options flow can help identify underlying sentiment in specific stocks. When it comes to penny stocks – an already speculative environment – the idea is the Put or Call options flow suggests bullish or bearish “bets” on stocks. Since options offer leverage, a significant position is thought to indicate directional potential. However, this isn’t 100% guaranteed. Options are also used to hedge existing stock positions.
Let’s say a firm has a significant short position on a stock heading into earnings. That firm might buy some Call options if earnings are positive instead of negative. This will allow the firm to leverage the Calls while adjusting its short to even out any potential losses that might come from a bad short trade. Instances like this won’t “show” when looking at options volume. So if you’re using unusual options activity, free or a paid service, keep this in mind.
1. Atai Life Sciences (NASDAQ: ATAI)
Psychedelic stocks have performed about as well as marijuana stocks over the last few months. Given the general uncertainties surrounding the future of recreational legislation, mass adoption from investors hasn’t necessarily been a trend. Nevertheless, that hasn’t stopped some from staking a claim in some expect as a new gold rush.
Atai Life Sciences, a Peter Thiel-backed company, has come into the spotlight recently. It specializes in mental health therapy development for treating mental health disorders. Atai uses technology and psychedelic medicine along with other drugs to accomplish this.
In its latest corporate earnings update, the company discussed its plans and goals for the year. It also shed some light on specific phase trials, including its Phase 1 KUR-101 trial, which dosed the first patient for treatment of Opioid Use Disorder. Topline results are expected later this year. Atai is also advancing its PCN-101 clinical drug-drug interaction study. The company wants to assess the pharmacokinetics of PCN-101 when used with other drugs for treating Treatment-Resistant Depression. In particular, a relative bioavailability study comparing the subcutaneous formulation to the existing IV formulation is anticipated to be initiated later this year.
ATAI Unusual Options Activity Today
Some interesting options flow came through today, which appears as a Straddle. This options trade includes buying calls and puts at the same strike. In this case, 5,562 contracts worth of volume came in at the $5 Strike Calls & Puts. Typically, a Straddle strategy is a neutral one and is taken when a trader expects a more volatile move in one direction or the other. It’s a losing proposition if an underlying stock only moves sideways.
2. MannKind Corporation (NASDAQ: MNKD)
Another one of the biotech penny stocks with unusual options activity today is MannKind Corporation. The company is developing therapeutics for treating endocrine and orphan lung diseases. Since May 12th, MNKD stock has been on the move and was recently helped by some M&A activity.
MannKind announced that it inked a deal with Zealand Pharma A/S (NASDAQ: ZEAL) to acquire V-Go® for $10 million. There will also be sales-based milestones plus the cost of specific inventory included in the agreement. V-Go will add to MannKind’s portfolio of diabetes solutions. The once-daily wearable insulin delivery device helps users with blood sugar control.
What’s more, the acquisition is expected to close this month. As no further details have emerged so far, it could be a source of speculation for the market.
MNKD Unusual Options Activity Today
If you’re looking for some unusual options volume today in MNKD stock, you’ll find it at the $3.50 Strike Calls expiring on June 17th. As of this article, over 4,400 contracts were traded. However, something to keep in mind is that there is a significant amount of Put contracts at the $2.50 Strike on the same expiration. Though no considerable volume came into those (so far), it may be worth noting.
3. AgriFORCE Growing Systems Ltd. (NASDAQ: AGRI)
Food and agriculture stocks have been red hot lately. It wasn’t only a result of international sanctions on Russian exports either. Recent news out of India has also triggered a shockwave across the global supply chain. Earlier this month, the country announced a ban on wheat sales that it said was “to manage the overall food security of the country.”
In addition to wanting to sustain its own food supply, a heatwave has also surged across the country. This directly impacted the domestic output as well. Given the current status of global food supply, companies with exposure to this niche have gained momentum. AgriFORCE Growing Systems is one of these companies. It has built a platform around AgTech facilities and solutions focusing on North America, Europe, & Asian markets. The company supplies plant-based foods and products using sustainable AgTech solutions “from seed to table.”
Earlier today, the company announced the completion of its acquisition of the IP of Manna Nutritional Group. This includes patent-pending technologies to process and convert grain into a low-starch, high-protein baking flour.
AGRI Unusual Options Activity Today
Options traders seem to have taken a shorter-term approach to AGRI stock. If you look at the unusual options activity today, you’ll see a higher level of volume in the $3 Calls expiring in a few days. There were just over 3,300 contracts of open interest, but more than 2,700 were traded at the time of this article.
Penny Stocks To Watch
Thanks to the stock market crash this year, volatility is reigning supreme. With that, it’s essential to understand that trends can shift quickly. Considering the already volatile nature of penny stocks, any speculative trading could magnify the trend. If you’re looking for unusual options volume today, make sure you’ve also considered other trends that could impact specific companies. For now, these are just a few of the more popular penny stocks today that have also seen a spike in options activity.