Ebola battle plays out in US options arena
As deadly virus spreads, trading volumes are soaring in American biotechnology companies which are developing treatments
The newest twist in the business of trying to capitalise on the outbreak of the Ebola virus is playing out in the US equity options market.
Canada-based Tekmira Pharmaceuticals, which is said to be furthest along among the companies working on a treatment, and Chimerix, whose experimental oral antiviral drug was used on the first US victim of the disease, have seen a huge increase in trading activity in their stock options.
Investors have been using the options market as a cheap way to bet on further gains in those two stocks, as well as other biotech stocks.
"It's just pure call speculators that hope that they [the companies] are going to find the cure and announce it tomorrow," said J.J. Kinahan, chief market strategist at brokerage TD Ameritrade.
The flow of news about the spread of the Ebola virus globally has resulted in sudden and large moves in the share prices of biotech stocks.