Moderna Options Traders Mixed On S&P 500 Inclusion

Moderna, Inc MRNA gapped up 6.64% Friday morning after it was announced the company will join the S&P 500 beginning July 21. The pharmaceutical company, which created a COVID-19 vaccine, will replace Alexion Pharmaceuticals, Inc. ALXN.

On Thursday morning, Jefferies increased its price target on Moderna to $250 and the stock blew through the level within the first 15 minutes of trading. Even if the stock drops down to fill the gap left behind on Friday, Moderna would still be about $10 higher than Jefferies target.

On Friday options traders were mixed on whether Moderna has room to fly higher in blue skies or if the gap up and run marked the temporary top although the traders skewed bullish. Bullish traders bet over $1.64 million Moderna’s stock hasn’t yet topped out yet while a number of bearish traders bet over $752,150 the stock will go south. The options trades below were filtered to include only orders totaling over $100,000.

See Also: COVID-19 Variants: What the Future Could Look Like After the Pandemic

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

The Bullish Moderna Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

• At 9:38 a.m., a trader executed a call sweep near the ask of 250 Moderna options with a strike price of $340 expiring on Oct. 15. The trade represented a $326,250 bullish bet for which the trader paid $13.05 per option contract.
• At 10:06 a.m., a trader executed a call sweep near the ask of 216 Moderna options with a strike price of $300 expiring on July 23. The trade represented a $235,440 bullish bet for which the trader paid $10.90 per option contract.
• At 10:57 a.m., a trader executed a call sweep near the ask of 200 Moderna options with a strike price of $300 expiring on Sept. 17. The trade represented a $488,000 bullish bet for which the trader paid $24.40 per option contract.
• At 11:04 a.m., a trader executed a call sweep near the ask of 451 Moderna options with a strike price of $360 expiring on Aug. 20. The trade represented a $201,146 bullish bet for which the trader paid $4.46 per option contract.
• At 11:29 a.m., a trader executed a call sweep near the ask of 226 Moderna options with a strike price of $275 expiring on July 23. The trade represented a $291,540 bullish bet for which the trader paid $12.90 per option contract.
• At 11:36 a.m., a trader executed a call sweep near the ask of 200 Moderna options with a strike price of $300 expiring on July 23. The trade represented a $102,000 bullish bet for which the trader paid $5.10 per option contract.

The Bearish Moderna Trades: Below is a look at the notable options alerts.

• At 9:57 a.m., a trader executed a put sweep near the ask of 200 Moderna options with a strike price of $230 expiring on Jan. 21, 2022. The trade represented a $440,000 bearish bet for which the trader paid $22 per option contract.
• At 10:07 a.m., a trader executed a put sweep near the ask of 434 Moderna options with a strike price of $280 expiring on July 16. The trade represented a $136,710 bearish bet for which the trader paid $3.15 per option contract.
• At 11:24 a.m., a trader executed a put sweep near the ask of 204 Moderna options with a strike price of $275 expiring on July 23. The trade represented a $175,440 bearish bet for which the trader paid $8.60 per option contract.

MRNA Price Action: Moderna was trading up 9.5% to $284.47 at time of writing.