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

Endocyte Inc (NASDAQ:ECYT) Risk Hits An Unsually High Level

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Risk Alert: Before we dive into any analysis we simply note that Endocyte Inc (NASDAQ:ECYT) 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 81.02% verus the IV30 of the S&P 500 at 11.15%. The annual high for Endocyte Inc IV30 is 144.28%.

To skip ahead of this risk alert and see if buying or selling options has been a winner in Endocyte Inc, you can go here: Geting serious about option trading.

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 Endocyte Inc (NASDAQ:ECYT) . 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 Endocyte 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 ECYT 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 ECYT.

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

ECYT HV 30     58.09%
ECYT Current IV30     81.02%
52 Week Low IV30     50.52%
52 Week High IV30     144.28%

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 ($1.80, $2.60) 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. Endocyte Inc shows an IV30 of 81.0%, which is an unsually high level for the company relative to its past.

The option market for ECYT has shown an IV30 annual low of 50.5% and an annual high of 144.3%, meaning that ECYT is at the 33% 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   
81.0% 50.5% 144.3%

The implied stock swing risk from the option market has created a range which is tighter in the next 30 calendar days for Endocyte Inc (NASDAQ:ECYT) than it has been on average for the last year on average. 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 58.09%.

We have an unusual situation now where the IV30 is depressed relative to the past, but even with that risk pricing, the option market reflects the likelihood of a greater stock movement in the next 30-days than the stock has realized in the last 30-days. Let's turn to a chart to see what's going on.
Note how much higher the forward looking stock swing price risk for Endocyte Inc is priced (81.0%) compared to what happened just in the last 30-days (58.1%).

Endocyte Inc Risk Rating
The ECYT 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 annual average.
The IV30 is above 80%.
The HV30 is above the annual average.
The IV30 is above the HV30.
The stock has moved just -0.9% over the last 3-months which does indicate some depressed risk.