Options Expiration Weighing on Dendreon (DNDN)

Dendreon (DNDN) has seen a lot of the old hyperactive trading volume come out of the stock now that it is post-FDA panel review and post-ASCO.  The stock has barely traded 2 million shares so far this morning and there was only 1 day this week where shares almost traded 10 million shares. 

The drag today outside of less ‘event trading’ is that today is also options expiration date.  The June $7.50 Strike Price is trying to act as a magnet as that is the most active strike, the closest strike, and generally the one with the highest open interest.  As of last look, the open interest for the $7.50 strike was more than 76,000 in the June-07 $7.50 calls and more than 48,000 in the June-07 $7.50 puts.

So far these contracts are seeing minimal trading volume, and we’ll have to see if that picks up at the end of the day.  There has also been very little roll-over into the July-2007 expirations so far as the volume is less and the open interest is much less on the same $7.50 strike prices. 

Unless there is some major surpise data or some major undercurrent that isn’t known, it looks like traders are looking elsewhere for their volatility in the biotech sector. 

Jon C. Ogg
June 15, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.