Juno Therapeutics (JUNO) Stock: An Option Trader's Dream

Juno Therapeutics (ticker: JUNO) stock soared on Wednesday, a day after the biopharmaceutical company was granted permission by the U.S. Food and Drug Administration to continue a phase II clinical trial of its potential cancer treatment, JCAR015. Shares opened the trading day up more than 25 percent, and by afternoon were up about 15 percent.

The trial was put on hold last week after the deaths of two patients in the trial in the previous week. The FDA required Juno to submit a complete response to address the issue, and Juno recognized that the deaths had occurred after adding a pre-conditioning agent called fludarabine. Under the new protocol, fludarabine will not be used.

JCAR015 is the most advanced drug in Juno's pipeline, and analysts believe it could be a huge catalyst for the stock. When the study was halted, a number of analysts slashed their price targets. On July 8, JPMorgan cut its price target for JUNO stock from $63 to $39, while FBR Capital trimmed its target from $73 to $61 per share.

JUNO stock plunged 31.9 percent on the news.

Juno's recent volatility, combined with the surge in trading volume, makes it a hot ticket for options traders, who often trade on volatility and volume.

At 1 p.m., Finviz logged Juno's relative volume at 13.69, indicating trading volume was nearly 14 times heavier than it normally is by 1 p.m.

The wild fluctuations of JUNO have led to dramatic changes in the options market. The open interest for July 16 $32.50 JUNO call contracts was just 349 going into Wednesday, meaning investors only held a total of 349 such contracts at the close of trading Tuesday. By about 1 p.m., trading volume for the same contract was 1,150, according to OptionsHouse. The mark price of those contracts was up from 2.5 cents Tuesday to 65 cents, a gain of 2,500 percent overnight.

Similarly, July 16 $35 JUNO calls had open interest of 559, but were showing volume of 2,600 by just after 1 p.m. Those calls also had a mark price of 2.5 cents Tuesday, but that had risen 500 percent to 15 cents on Wednesday afternoon.

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John Divine is a staff writer for U.S. News & World Report. He is also a longtime investor, and has previously written about investing and the markets for InvestorPlace and The Motley Fool. You can follow him on Twitter @divinebizkid or give him the Tip of the Century at jdivine@usnews.com.