Unusual Options Activity: Danimer Scientific (DNMR)

Bioplastics producer Danimer Scientific (DNMR) is down about 25 percent over the past year. One trader sees a potential rebound in next two months.

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  • That’s based on the August $4 calls. With 63 days until expiration, 10,001 contracts traded compared to a prior open interest of 116, for an 86-fold rise in volume on the trade. The buyer of the calls paid $0.25 to make the bullish bet.

    Shares recently went for about $3.00, so the stock would need to rise by $1.00, or 33 percent, for the options to move in-the-money. Given that shares have had a similar jump higher earlier this year, such a move is likely possible.

    As the producer of a specialty product, Danimer is more volatile than the chemical industry as a whole. And Danimer has struggled with profitability, a trend likely to continue with revenues down nearly 20 percent over the past year.

    Action to take: Shares have recently come off a move from the $4 range, and may retest them in the coming months. That could lead to a quick mid-double-digit gain for shareholders. As a small cap tech stock, investors shouldn’t buy a large stake in the company.

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  • For traders, the August $4 calls are inexpensive and could see high-double-digit gains or better on a move higher. Look to take profits if the calls move in-the-money.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.