Viking Therapeutics Options Activity Surges Ahead of Key VK2735 Data

Options market activity for Viking Therapeutics (NASDAQ: VKTX) surged on Wednesday, signaling that traders are positioning for a significant, near-term stock price movement. The heightened activity is centered around the company's expected release of Phase 1 clinical trial data for its subcutaneous weight-loss drug candidate, VK2735.

Market Signals a Binary Event

Trading volume in Viking's options reached 21,567 contracts, with a call-to-put ratio of 2.57-to-1, indicating a strong bullish bias. Much of this activity was concentrated in contracts with a September 11 expiration date, just two trading sessions away, underscoring the market's focus on an imminent catalyst.

Notable trading activity included:

• Sept. 11 $35 Calls: Volume of 2,350 contracts.
• Sept. 25 $42 Calls: Volume of 2,554 contracts, representing almost entirely new positions.
• Sept. 11 $31 Puts: Volume of 1,789 contracts, suggesting hedging or bearish bets.

This pattern of heavy, short-dated call buying alongside significant put activity is characteristic of positioning for a binary event, where trial results could send the stock sharply higher or lower.

Volatility Skew Points to Upside Bets

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The pricing of these options further reveals the market's expectations. The stock's three-month implied volatility, a measure of expected price swings, stood at 99.88%. More telling is the volatility skew, which has flipped to favor call options.

A negative 90/110 skew of -8.92 indicates that out-of-the-money calls are now priced at a premium to equivalent puts. This reversal from a normal put-skew structure suggests strong demand from traders betting on a significant rally following the data release.

Analyst Context and Market Risks

The options activity aligns with some bullish analyst sentiment. B.Riley recently reiterated a Buy rating on VKTX with an $85 price target, citing an "attractive setup" into the data release. The heavy volume in the September $42 calls shows traders are betting on a rally of nearly 30% from the stock's Wednesday price of around $32.80.

However, the substantial put volume serves as a reminder of the high risks involved. A failure to meet efficacy or safety endpoints in the VK2735 maintenance data could lead to a steep sell-off, particularly amid intensifying competition in the GLP-1 drug landscape.