Novo Bears Rise After Stock Propels Denmark To 2015 Best: Options
By ?Trista Kelley
(Bloomberg) — The stock that?s pushing Denmark?s benchmark equity index to records also has traders rushing to hedge against declines.
Novo Nordisk A/S has rallied 25 percent this year to an all-time high as analysts estimate the world?s biggest insulin maker will report its best quarterly profit jump since 2008 next month. That hasn?t stopped a record number of bearish options from trading on Monday.
A drop in Novo Nordisk would be significant because it accounts for 41 percent of the OMX Copenhagen 20 Index, the best performer this year among developed markets. Pricing competition in the U.S. and potential risks to the company?s application to market a new insulin product may be spurring bearish sentiment, says Nicholas Turner, an analyst with Mirabaud Securities LLP in London.
?Maybe all the good news is in the story and now we?ve got a level of uncertainty of where the growth is going,? Turner said. He has a neutral rating on the shares. ?I?ve always thought that the stock is massively overvalued. Everything good is out and now maybe we?ll see weakness through 2015.?
A block of 10,800 Novo Nordisk bearish options expiring next month with an exercise price of 270 kroner changed hands on Monday. Seconds later, the same number of 300-kroner puts traded. Only 110 calls were exchanged. The four most-owned contracts are bearish.
Novo Nordisk spokeswoman Katrine Rud von Sperling declined to comment on the options trading.
The stock had ended at a record 321.10 kroner on Friday. It climbed to 326 kroner on Tuesday and was little changed as of 1:35 p.m. in Copenhagen.
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