Are You Looking For The Best Penny Stocks To Buy Now? Unusual Options Activity Could Give Some Clues
If you’re hunting for the best penny stocks to buy, your choices are pretty open. Thanks to the stock market crash this year, plenty of popular companies have slumped to some of the lowest levels in recent history. That level includes the sub-$5 range. More volatility, growing popularity in day trading, and people looking to make money in a down market have brought some attention to cheap stocks.
It might be easy to find a popular Twitter handle or subReddit to follow along with. But in the end, you’re likely looking at companies after the “big move” has already been made. How do you find the best penny stocks to buy or ones to add to your watch list before the momentum hits? Some traders use data to their advantage, and one of the data sets includes unusual options activity.
Does call-buying always mean a bull run is incoming? Does put-buying mean a significant pullback is on the way? No, but some traders use irregular activity as one of the many other data points in their research process to formulate a trading thesis to support or refute their approach to buying (or avoiding) certain stocks.
This article looks at a handful of names that experienced unusual options activity today. We look at what’s going on with the companies, any potential catalysts, and any upcoming events that could have prompted the action. Then you can decide if they’re worth adding to your watch list or not. This is also a continuation of our article 3 Top Penny Stocks With Unusual Options Activity, Time To Buy? The complete list of penny stocks will be provided at the end of the article.
Penny Stocks To Watch With Unusual Options Action
Amyris Inc. (NASDAQ: AMRS)
Shares of Amyris Inc. are bouncing back this week after a considerable gap-down earlier this month. The biotechnology stock dropped after the company announced earnings and reported a wider-than-expected third-quarter loss. Despite posting its sixth-consecutive quarter of record consumer revenue and posting record core revenue of $71.1 million, analysts were expecting much more from the company.
Nevertheless, management remained optimistic in light of the results overall. CEO John Melo explained, “After an extended period of rapid organic growth and acquisition activity, we are increasingly focused on brand integration, cash conversion efficiency, and cost optimization to achieve our profitability goals…To reach these goals, we completed previously announced fundraising of $80 million in Q3 and $100 million in Q4. Additionally, we are on track to complete a substantial strategic transaction by year-end.”
With that end-of-year milestone as the backdrop, speculation has begun buzzing again. That may have already started showing in the options market. In particular, the December 16th expiration $3 Calls have traded a significantly higher level of volume on Friday. That’s also against a higher Open Interest with more than 10,000 contracts for that strike.
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Nordic American Tankers Ltd. (NYSE: NAT)
One of the few penny stocks with dividends on this list is Nordic American Tankers. The international tanker company recently declared a 5-cent dividend per share, which is the 101st consecutive quarterly dividend and has a record date of December 6th. The company also said that “the prospects are good for increased dividends going forward.”
Nordic’s fleet consists of crude oil tankers, and the state of the energy market right now has brought a bit more volatility to related stocks. Overall, NAT stock has continued a strong uptrend throughout the year and reached fresh 52-week highs this week.
Regarding NAT stock options, there are both near and longer-term dates to look at. The December $4 strike Calls saw an uptick in action today. But if you look at the January 20, 2023, in-the-money $3 Calls, you’ll see more than double the activity. As of this article, 4,089 contracts were traded. That January options chain also shows a significantly high level of Open Interest contracts from the $2 strike through the $4 strike.
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Ginkgo Bioworks Holdings Inc. (NYSE: DNA)
Cell programming and biosecurity company Ginkgo Bioworks has seen a more muted sentiment in the stock market this week. The trend comes after Ginkgo launched a $100 million offering. While dilution risk is evident, especially with penny stocks, the use of proceeds is what traders pay attention to. Are dollars going to something like “general working capital,” or is it something more specific? A specified target is often seen as something better than “general” purposes.
Why does that matter? In this case, Ginkgo stated in its financing PR that it expects the offering to close “around Friday,” which is today. It also said it plans to use the net proceeds to “offset the cash used to fund its acquisition of certain assets and liabilities of Bayer CropScience,” among other uses.
Ginkgo’s platform allows applications in food and agriculture. Earlier this quarter, it announced a transaction with Bayer to begin a multi-year strategic partnership to speed up the R&D of biological products for agriculture. The deal includes the divestment of Bayer’s West Sacramento Biologics Research & Development site and its internal discovery and lead optimization platform.
Dr. Robert Reiter, Head of R&D at Bayer’s Crop Science Division. “The open innovation approach will accelerate the product pipeline and will make sure that we bring high-quality biological solutions and innovative technologies to the market faster.”
Options for DNA stock have seen an uptick in unusual activity today. The December 16th $3 Calls are in focus, with more than 7,900 contracts traded. Considering the timing of the financing’s closing and the use of proceeds, it will be interesting to see how things go for DNA stock into year-end.
Viking Therapeutics (NASDAQ: VKTX)
Despite a recent pullback, Viking Therapeutics stock has been in a strong uptrend during the second half of the year. The latest move has come after Viking’s Q3 earnings update, which included information on its pipeline treatments and outlook.
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Viking’s Phase 2b VOYAGE study for VK2809 is on track to complete enrollment this quarter, with data expected next quarter. VK2809 is the company’s candidate for treating liver disorders. The company also said its VK2735 and VK0214 Phase 1 studies are nearing expected data readouts early next year.
Viking also presented at this week’s Stifel 2022 Healthcare Conference. It delivered a corporate presentation and participated in one-on-one meetings. Heading into the tail-end of the week, VKTX options momentum has picked up. The December 16 $5 Calls saw more than 7x the Open Interest traded in Friday’s volume.
List Of Penny Stocks With Unusual Options Activity
- Amyris Inc. (NASDAQ: AMRS)
- Nordic American Tankers Ltd. (NYSE: NAT)
- Ginkgo Bioworks Holdings Inc. (NYSE: DNA)
- Viking Therapeutics (NASDAQ: VKTX)
- Canopy Growth Corporation (NASDAQ: CGC)
- Agenus Inc. (NASDAQ: AGEN)
- Globalstar Inc. (NYSEAMERICAN: GSAT)
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