Pharma Stock Set to Double Today

The stock is at the top of the Nasdaq today

While the broader stock market reels on ramped-up trade tensions between the U.S. and China, one equity bucking the trend in a huge way is Allakos Inc (NASDAQ:ALLK). The pharma stock is at the top of the Nasdaq this morning, more than doubling after the company's eosinophilic gastritis treatment met the goal in a mid-stage study. In addition, the company named Leo Redmond its new CFO. Against this backdrop, ALLK stock is up 118% at $67.44, and options are flying off the shelves.

Allakos shares earlier touched a record high of $70, surging past their previous all-time peak of $65.48, touched in mid-December. The security has also barreled north of recent resistance in the $45 neighborhood, set for its best day on record.

While absolute volume remains light, ALLK options are trading at a rapid-fire rate. More than 1,000 puts have changed hands already -- 18 times the average intraday volume, and on pace for an annual high. Most active is the August 60 put, where it looks like speculators are selling the contracts to open. By writing the puts, the sellers expect ALLK shares to remain north of $60 through the close on Friday, Aug. 16, when front-month options expire.

Elsewhere, a short squeeze could keep the wind at the stock's back. Short interest grew more than 11% during the most recent reporting period, and now represents more than one-third of the equity's total available float. At Allakos stock's average pace of trading, it would take shorts more than three weeks to buy back their bearish bets.