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Top 2 Stocks with Unusual Call Activities on Tuesday: VIVUS and Merck

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Tuesday’s market sentiment was driven by extreme greed with Fear & Greed Index at 85, which had increased from the previous close of 81. Top 2 stocks had been identified with unusual daily call volume ratio in this article. Unusual option activities can be an indicator or precursor of a major movement for the underlying stock.

© Mike Hodges
Ticker Call Volume Average Call Volume Daily Volume Ratio
VVUS 19,255 6,110 3.15
MRK 52,931 12,142 4.36

Source: Schaeffer’s Research


VIVUS, Inc. (VVUS) is a biopharmaceutical company, engaged in the development and commercialization of therapeutic drugs for underserved markets, including obesity and related morbidities, such as sleep apnea and diabetes, and men’s sexual health.

VVUS closed at $12.96 with 6.58% increase on February 5, 2013. VVUS had been trading in the range of $9.86-$31.21 in the past 52 weeks. VVUS had a beta of 1.20.

VVUS has an enterprise value of $948.68M with a market cap of $1.30B. VVUS has a negative operating margin and a negative cash flow. VVUS has a total cash of $274.48M without any debt. The recent catalyst for VVUS is the positive study that its obesity drug Qsymia reduced certain risk factors for heart disease.

The most active call option was Mar. 15, 2013 call at the strike price of $13.00 with a volume of 4,825 and an open interest of 13,031. The implied volatility is 76.3, and the chance of breakeven is 30.48. The historical volatility for VVUS is 47.61 for 1 month , 76.16 for 3 months, and 87.39 for 1 year.

Merck & Co., Inc.

Merck & Co., Inc. (MRK) is a global health care company, which discovers, develops, manufactures and markets a range of innovative products to improve human and animal health. MRK closed at $41.43 with 1.42% gain on February 5, 2013. MRK had been trading in the range of $36.91-$48.00 in the past 52 weeks. MRK has a very low beta of 0.32.


MRK has an enterprise value of $125.67B with a market cap of $125.95B. MRK has a total cash of $18.12B with a total debt of $19.60B. MRK has a profit margin of 14.09% and an operating margin of 22.60%. MRK’s ROE Is 11.80%.

On February 1, 2013, MRK reported Q4, 2012 earnings of 83 cents per share, beating analysts’ expectation of 81 cents. However, the company issued a cautious 2013 profit forecast and indicated a delay seeking approval for a high-profile osteoporosis drugs. On February 4, MRK was downgraded by analysts at Leerink Swann from an “outperform” rating to a “market perform.” The stock had dropped over 4.6% after the earnings and downgrade since then.

The most active call option was Apr. 19, 2013 call at the strike price of $41.00 with a call volume of 11,949 and an open interest of 8.878. The implied volatility is 17.3, and the chance of breakeven is 33.84. The historical volatility for MRK is 18.90 for 1 month, 18.81 for 3 months, and 15.96 for 1 year.

Note: All numbers/prices are quoted from the closing of February 5, 2013 with the data provided from Barron’s, Morningstar, Schaeffer’s Investment Research, Inc., Google Finance, and Yahoo! Finance.  Investors and traders are recommended to do their own due diligence and research before making any trading/investing decisions.


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