Unusual Option Trade in Neurocrine Biosciences, Inc (NBIX)

We love unusual call option buys in biotech stocks!  So naturally we were very interested when we saw some unusual call buying (again) in Neurocrine Biosciences, Inc. (NBIX).

A trader seems to think that Neurocrine Biosciences, Inc. (NBIX) is going higher after their recent earning report that matched analyst expectations.   The trader bought 1170 NBIX Jan $15 calls. They paid $2.40 at the ask, for those calls that expire in January.  That makes for a good sized bet with a transaction value of over $281,000.

Neurocrine Biosciences, Inc. (NBIX) is currently trading at $13.27 down 55 cents on the day, though it is off it’s low of the day of $13.20.  NBIX has a 52 week high of $20.29, and a low of $8.57 on the year.  It’s traded a little below normal volume today with 460,000 shares trading by 3:30 pm today.

Neurocrine Biosciences, Inc. (NBIX)announced quarterly earnings this yesterday,  August 6, so we know this call buy isn’t a play on leaked earnings.  Someone seems to know this sell off this morning was way overdone.

neurocrine NBIX logoSo what does this trader know that no one else seems to know?  May be some new guidance coming or other material news is “anticipated” to be released, such as an upgrade.

We like this trade given it’s size, and the market, and while we missed the real time trade, the calls are still only asking $2.50 so only 10 cents more than the smart money paid.  Given that price, we have jumped in on this trader’s bandwagon.  He better have a good ride planned.

Seven analysts currently follow Neurocrine Biosciences, Inc. (NBIX).  The average rating on NBIX is “buy” and the average price target is a staggering $21.00.  Analysts expected a loss of 18 cents this quarter and that’s exactly what the company reported.  The last analyst action was way back in April 24th, when Nomura reiterated its “buy” rating and their price target $23.00.  Based on these analysts ratings this pig has some room to grow.  Of course the seven firms covering this stock are not exactly top tier firms.

Still, we like this unusual call buy which happened on serious weakness in Neurocrine Biosciences, Inc. (NBIX) and are ready to ring the profit bell soon.