MEIP's Volatile Surge: A 25% Intraday Rally Sparks Market Buzz

Summary
• MEI Pharma (MEIP) surges 25% to $7.40, marking a dramatic intraday rebound from $6.34
• $100M PIPE deal and Litecoin treasury strategy drive speculative fervor
• Turnover hits 94.25% of float, signaling intense retail participation

MEI Pharma (MEIP) has ignited a frenzy in the market, surging 25% to $7.40 by 3:26 PM ET. The stock’s 8.25-to-6.34 range underscores a volatile session fueled by a $100M private investment in public equity (PIPE) and a groundbreaking decision to integrate Litecoin into its treasury strategy. With turnover exceeding 94% of the float, the move highlights a rare alignment of capital infusion and speculative momentum.

MEIP's $100M PIPE and Litecoin Treasury Move Ignite Rally
MEI Pharma’s dramatic 25% rally stems from a $100M PIPE transaction announced on July 18, which includes the issuance of 29.2 million shares at $3.42 apiece. Simultaneously, the company’s strategic pivot to adopt Litecoin as a treasury reserve asset has positioned it as the first publicly traded pharmaceutical firm to embrace cryptocurrency. This dual catalyst—capital infusion and innovation in asset management—has triggered a speculative surge, particularly as the stock trades near its 52-week high of $9.00.

Options Playbook: Leveraging MEIP’s Volatility with Gamma-Driven Contracts
• Technical Indicators: RSI at 86.45 (overbought), MACD (0.56) above signal line (0.27), bullish divergence
• Key Levels: Immediate resistance at $8.25 (intraday high), support at $6.34 (session low)

MEIP’s short-term bullish trend and overbought RSI suggest a continuation of momentum, but caution is warranted near the 52-week high of $9.00. The options chain reveals two high-impact contracts: MEIP20250815C7.5 (call) and MEIP20250815P7.5 (put).

MEIP20250815C7.5 (Call Option):
• Strike: $7.50, Expiry: August 15, IV: 178%, Delta: 0.54, Gamma: 0.119, Theta: -0.030, Turnover: $103.6M
• High leverage (6.11%) and moderate delta suggest strong upside capture if MEIP breaks above $7.50.
• Payoff at 5% upside (ST = $7.77): $0.27 per contract, 43.75% price gain aligns with theta decay and gamma sensitivity.

MEIP20250815P7.5 (Put Option):
• Strike: $7.50, Expiry: August 15, IV: 162%, Delta: -0.47, Gamma: 0.131, Theta: -0.015, Turnover: $8.17M
• High gamma (0.131) and mid-IV position it as a hedge against volatility compression if MEIP consolidates.
• Payoff at 5% downside (ST = $7.03): $0.47 per contract, leveraging delta’s sensitivity to price decay.

Aggressive bulls should prioritize MEIP20250815C7.5 for a breakout above $7.50, while short-term volatility traders may use MEIP20250815P7.5 to capitalize on potential pullbacks.

Backtest MEI Pharma Stock Performance
The Backtest of the Meligen ETF (MEIP) after a 25% intraday surge shows mixed results. While the 3-Day win rate is 42.60%, the 10-Day win rate is 44.79%, and the 30-Day win rate is 39.31%, indicating a higher probability of positive returns in the short term, the overall returns over the backtested periods are negative, with a maximum return of only 0.45% over 30 days. This suggests that while there is a good chance of capturing intraday gains, holding the ETF beyond a few days leads to modest returns or even slight losses.

MEIP’s 25% Rally: A High-Volatility Trade with Clear Entry Points
MEI Pharma’s 25% intraday surge is fueled by a $100M PIPE and a first-in-class Litecoin treasury strategy, creating a short-term bullish setup. Traders should focus on the $8.25 intraday high as a critical resistance level and monitor RSI divergence for overbought signals. With Johnson & Johnson (JNJ) up 0.70% as the sector leader, the biopharma space remains mixed. Action: Buy MEIP20250815C7.5 for a $7.50 breakout or short MEIP20250815P7.5 for a 5% downside scenario.