Everyone seems to have a strategy when it comes to cheap stocks to buy. Maybe it’s finding the direction of the wind or seeing if a solar eclipse is coming. All joking aside, there are some pretty unique “strategies” that traders use to build their watch list. On a more technical side, data is a huge asset for some. Everything from penny stocks with high volume to stocks with insider buying are in the mix. You’ve also got more sentiment-based strategies used by speculative investors and traders alike. Figuring out how to identify an early trend is something everyone wants, and different data sets are used to achieve that.
Today, we look at a few penny stocks to watch based on unusual options activity. Why does it matter? Those who subscribe to this idea are looking for “big bets” made in the options market. If you’re new to options, you can check out Trading Options 101: A Beginner’s Guide. Options are a way to hedge and, like penny stocks, a way to leverage lower capital amounts for an opportunity for upsized gains.
At the very least, traders will use the unusual or irregular activity to make an educated guess on future trends of specific stocks. They’ll also watch for interesting activity that sometimes comes to light before significant company events. At the end of the day, it’s more data to formulate an investment thesis. Today we look at 3 penny stocks that have experienced unusual activity in the stock market today.
Penny Stocks To Buy?
- Pear Therapeutics Inc. (NASDAQ: PEAR)
- Catalyst Biosciences Inc. (NASDAQ: CBIO)
- Endeavour Silver Corporation (NYSE: EXK)
Pear Therapeutics Inc. (NASDAQ: PEAR)
It may not look like it from the 6-month chart, but PEAR stock has seen some bullish momentum. The last few days, in particular, saw shares jump from under $2.20 to over $4 as of this week. Pear Therapeutics specializes in “software-based” medicines. Prescription digital therapeutics or “PDTs” are designed by the company and indicated for opioid use disorder (reSET-O), substance use disorder (reSET), and chronic insomnia (Somryst).
Analysts at Chardan Research and Citigroup recently adjusted price targets on the stock. Both have Buy ratings on the stock with targets between $11 and $13. These shifts came after the company’s recent earnings beat in May. What’s more, Pear announced another milestone this week. Study data revealed interesting findings regarding the reSET-O platform. The FDA-authorized PDT demonstrated reached patients across a wide range of geographies and suggested that PDTs may allow broad access to address health equity.
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Yuri Maricich, MD, MBA, Chief Medical Officer, Pear Therapeutics, “These results suggest reSET-O may enable access to behavioral treatments for OUD across geographic areas, which can help address health equity for those seeking recovery.”
PEAR Unusual Options Activity Today
While 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 more than 2,800 contracts traded today.
Catalyst Biosciences Inc. (NASDAQ: CBIO)
Shares of Catalyst Biosciences have already been on the move this week. Yesterday we discussed the company on a list of penny stocks under $1 to watch this week. While CBIO stock has jumped above that $1 threshold, it remains in focus among the trading community.
This week the biopharma company announced that it sold its portfolio of protease medicines, including its CB 2782-PEG platform, to Vertex Pharmaceuticals (NASDAQ: VRTX). The news of a sale is great, but the price tag has traders reacting. 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 some additional capital.
It was something further echoed by the company CEO who said, Nassim Usman, Ph.D., “We have been exploring strategic alternatives to monetize our assets and maximize value for our shareholders. This sale is part of the ongoing strategic process that we announced in February to explore alternatives and create value for shareholders.”
CBIO Unusual Options Activity Today
A few thousand Open Interest contracts are spread across all options chains. However, today we looked at the June 17, 2022 Calls. In particular, the $2.50 strike showed the most amount of volume at more than 2,700 contracts. This compared to more than 6,100 contracts of open interest.
Endeavour Silver Corporation (NYSE: EXK)
Precious metals prices have experienced a strong bout of volatility. Being one of them, Silver hasn’t been immune to this either. Over the last few days, companies, including Endeavour Silver, have enjoyed an excellent rebound, with shares bouncing back roughly 20%.
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Earlier this month, Endeavour announced that it’s on track to achieve its 2022 production guidance. “Our first quarter performance was strong, putting us on track to achieve our 2022 production guidance,” said Dan Dickson, CEO of Endeavour Silver, in a May update. “High-grade ore at Guanacevi was a driving force and is expected to continue throughout the balance of the year, while production at Bolanitos remains solid. Industry-wide inflation is a growing challenge and we continue to look for 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 financed, is expected to close this quarter following receipt of approval from the Mexican Federal Economics Competition Commission. After the deal closes, drilling will commence to verify Pitarrilla’s historical data and update the historical resource. This will become a key focus for us for the balance of 2022.
With this pending acquisition and a rebound in metals, EXK stock and others are back in focus.
EXK Unusual Options Activity Today
The options chain for EXK may be a bit more interesting for some readers. That’s because you have to look out to Call options expiring in 2024. The January 19, 2024, $10 strike Calls saw over 1,500 contracts trade against 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 in 2022, volatility is at the forefront. It’s important to know that trends can change quickly. In the case of penny stocks, speculative trading could magnify the specific trends. If you’re looking for unusual options volume today and don’t have access to unusual options activity alerts, or an unusual options activity scanner, we hope to offer some insight with updates like this. 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.
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