Options Update: Merck (MRK) & Schering-Plough (SGP)
Merck (MRK)
MRK Volatility Up; Shares Sell Off On Disappointing Cholesterol Study Results
MRK is recently down $7.21 to $37.33.
A panel of cardiologists called on physicians to sharply curtail their use of cholesterol-lowering drugs marketed by MRK and SGP.
Leerink Swann says "We continue to recommend MRK for long-term investors."
MRK call option volume of 45,342 contracts compares to put volume of 40,672 contracts.
MRK April and May option implied volatility of 44 is above its 26-week average of 31, suggesting larger price movement.
Schering-Plough (SGP)
SGP Volatility At 55 After Disappointing Cholesterol Study
SGP is recently down $5.07 to $14.36.
A panel of cardiologists called on physicians to sharply curtail their use of cholesterol-lowering drugs Vytorin (combination of MRK's Zocor and SGP's Zetia) and Zetia. This came after a clinical study showed the drugs didn't work any better than less expensive statin drugs.
SGP call option volume of 68,275 contracts compares to put volume of 27,152 contracts.
SGP April option implied volatility of 55 is above is 26-week average of 36, suggesting larger price movement.
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About Paul Foster
Paul Foster is a former member of the Chicago Board Options Exchange with 21-years of professional experience in the capital markets, investments, trading, corporate finance, arbitrage, options and mergers & acquisitions. His writing about the options market has appeared in a wide variety of publications.
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