Option Market Alert: Bellicum Pharmaceuticals Inc Implied Price Swing Hits An Unsually High Level

Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) Risk Hits An Unsually High Level

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Risk Alert: Before we dive into any analysis we simply note that Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) risk is elevated. We'll detail it below -- but that's the lede -- the option market is starting to flash those neon lights that signal "risk is rising" with an IV30 of 68.69% verus the IV30 of the S&P 500 at 11.15%. The annual high for Bellicum Pharmaceuticals Inc IV30 is 112.1%.

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This is a proprietary risk rating and risk alert system that looks forward for the next month -- or really 30 days to be exact -- and that includes weekends. The system is based on multiple interactions of data points, many of which come directly from the option market for Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) . The creator of this model is Capital Market Laboratories (

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In the "Why This Matters" section at the end of this article on Bellicum Pharmaceuticals Inc we're going to take a step back and show in great specificity that there is actually a lot less "luck" in successful option trading than many people know. The whole concept of an "option trading expert" is vastly over complicated and we'll talk about how superior returns are earned.

But first, let's turn back to BLCM and the company's risk rating:

We also take a peek at the implied vol for the Health Care ETF (XLV), our broad based proxy for BLCM.

S&P 500 IV30     11.15%
Nasdaq 100 IV30     12.44%
XLV IV30     11.89%

BLCM HV 30     72.52%
BLCM Current IV30     68.69%
52 Week Low IV30     58.1%
52 Week High IV30     112.1%

The implied price swing risk as reflected by the option market has hit an unsually high level relative to the company's past. The option market reflects a 95% confidence interval stock price range of ($11.90, $16.30) within the next 30 calendar days.

The IV30® is the implied price swing risk reflected by the option market in the stock price for the next 30 calendar days -- it's forward looking. Bellicum Pharmaceuticals Inc shows an IV30 of 68.7%, which is an unsually high level for the company relative to its past.

The option market for BLCM has shown an IV30 annual low of 58.1% and an annual high of 112.1%, meaning that BLCM is at the 20% percentile right now. Here's a table of the data before we dig into the implied price swing risk rating further.

Current IV30    
Low IV30    
High IV30   
68.7% 58.1% 112.1%

The implied stock swing risk from the option market is significantly tighter in the next 30 calendar days for Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) than it has been on average for the year. But, even though the IV30 percentile is below 50, other critical volatility measures that we discuss below point to elevated swing price risk.
Further, if we look backwards, the stock has a realized 30-day historical volatility, called the HV30, of 72.52%.

We have a situation now where the IV30 is substantially depressed relative to the past resulting in a risk pricing of less stock movement in the next 30-days than the stock has see in the last 30-days. Let's turn to a chart to see what's going on.
Note how similar the forward risk for Bellicum Pharmaceuticals Inc is priced (68.7%) compared to what happened just in the last 30-days (72.5%).

Bellicum Pharmaceuticals Inc Risk Rating
The BLCM risk rating is at 4, where the rating goes from one (the lowest risk) to five (the highest risk). The driving factors for the 4 rating are:

The IV30 is below the 20th percentile.
The IV30 is above 60%.
The HV30 is above the annual average.
The HV30 is above 70%.
The stock has moved +12.4% over the last 3-months which does indicate some elevated risk.