Novo Nordisk A/S (NYSE:NVO) stock is 14.9% lower to trade at $40.38 at last check, after an 84-week trial showed the pharmaceutical company's next-generation weight loss drug CagriSema wasn't as effective as Eli Lilly's (LLY) tirzepatide, which is the active ingredient of Mounjaro and Zepbound.
NVO earlier slipped to a four-year low of $39.97, and is now on track for a fifth-straight loss and biggest single-day percentage loss since July. Over the past 12 months, the shares have dropped more than 54%.
Options traders lean bearish. This is per Novo Nordisk stock's 10-day put/call volume ratio of 4.26 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 92% of readings from the last 12 months.
Drilling down to today's options activity, 72,000 calls and 57,000 puts have already crossed the tape -- five times the volume typically seen at this point. The most popular contracts are the weekly 3/6 40-strike put and May 35 call, with new positions currently opening there.
NVO has tended to outperform traders' volatility expectations during the past year, per its Schaeffer's Volatility Scorecard (SVS) of 80 out of 100. Plus, its Schaeffer’s Volatility Index (SVI) sits in the 23rd percentile of annual reading, indicating options are affordable.
