MEI Pharma's MEIP Stock Surges 39%—What's Behind the Volatility?

Summary
• MEI Pharma's stock (MEIP) surges 39.33% intraday, trading at $6.27 as of 15:14 ET
• Company announces $100M private placement to launch Litecoin treasury strategy, with Charlie Lee joining the board
• Intraday range spans $5.22 to $9.00, with turnover exploding 544% to 35.8M shares

MEI Pharma (MEIP) is experiencing one of the most dramatic intraday rallies in recent market history, driven by a bold strategic pivot into digital assets. The stock has surged over 39% following the announcement of a $100M private placement to establish a Litecoin treasury, with cryptocurrency pioneer Charlie Lee joining the board. This unprecedented move has ignited massive volume and volatility, positioning MEIP as a speculative catalyst in the intersection of biotech and crypto markets.

Litecoin Treasury Strategy Ignites Speculative Frenzy
MEI Pharma's historic 39% intraday rally stems from its bold decision to become the first publicly traded company to adopt Litecoin as a treasury reserve asset. The $100M private placement—priced at $3.42 per share—will fully fund the acquisition of Litecoin, with proceeds to be managed by GSR, a leading crypto market maker. The transaction, led by Litecoin founder Charlie Lee and institutional crypto investors, has redefined MEIP's value proposition, transforming it from a biotech play to a crypto-enabled capital structure innovator. This strategic pivot has triggered immediate market re-rating, as investors price in the potential for Litecoin's volatility to amplify MEIP's equity value.

Options Playbook: Leveraging MEIP's Volatility with Gamma-Driven Contracts
• MACD: 0.36 (bullish divergence), Signal Line: 0.19, Histogram: 0.17 (positive momentum)
• RSI: 80.47 (overbought), Bollinger Bands: Price at $6.27 vs. upper band $3.85 (compressed range anomaly)
• 200D MA: $2.54 (price at $6.27, >145% above)

MEIP's technical profile screams short-term overbought conditions with explosive momentum. The RSI at 80.47 and MACD divergence suggest continuation potential despite overbought levels. Key support/resistance levels from 200D MA ($2.54) to 52W high ($9.00) define a volatile trading range. Two options contracts stand out for gamma-driven positioning:

• MEIP20260320P7.5 (Put, $7.5 strike, Mar 2026):
- IV: 151.03% (extreme volatility)
- Delta: -0.31 (moderate bearish exposure)
- Theta: -0.0045 (time decay at $0.0045/day)
- Gamma: 0.0459 (high sensitivity to price swings)
- Turnover: 1,476 contracts (liquid)
• MEIP20260320C7.5 (Call, $7.5 strike, Mar 2026):
- IV: 224.08% (hyper-volatile)
- Delta: 0.798 (aggressive bullish bias)
- Theta: -0.0068 (time decay at $0.0068/day)
- Gamma: 0.0247 (moderate sensitivity)
- Turnover: 1,524 contracts (liquid)

Payoff Analysis: At 5% upside ($6.58), the call option (C7.5) would yield max(0, $6.58 - $7.50) = $0 (out of the money), while the put (P7.5) would show max(0, $7.50 - $6.58) = $0.92 intrinsic value. This highlights the put's potential as a volatility hedge. Given the 151% IV in the put and 224% in the call, aggressive traders could consider a gamma scalping strategy between these contracts, capitalizing on MEIP's expected volatility. If $7.50 holds, MEIP20260320C7.5 offers bullish leverage; if it breaks, MEIP20260320P7.5 provides downside protection.

Backtest MEI Pharma Stock Performance
The 39% intraday surge in MEIP has historically led to mixed short-to-medium-term performance. While the 3-day win rate is 43.81%, the 10-day win rate drops to 41.65%, and the 30-day win rate is 46.17%, indicating a higher probability of positive returns in the immediate aftermath of such a surge, but also suggests volatility in the medium term. The maximum return during the backtest period was 0.24%, which occurred on day 9, suggesting that while there is potential for gains, the strategy also carries risk.

MEIP's Gamma Play: Position for the Next 90 Days
MEI Pharma's transformation into a crypto-enabled biotech has created a unique trading environment where traditional sector dynamics no longer apply. With Litecoin's price action and MEIP's capital structure now intertwined, the stock's near-term trajectory hinges on institutional adoption of digital assets as a reserve asset. The pharmaceutical sector leader Johnson & Johnson (JNJ) currently trading flat with a 0.78% intraday move highlights MEIP's divergence from traditional biotech plays. Investors should monitor the $7.50 psychological level—holding above this would validate the bullish case, while a breakdown could trigger a re-rating toward the 200D MA at $2.54. Aggressive bulls should scale into MEIP20260320C7.5 as a leveraged play; cautious traders should hedge with MEIP20260320P7.5. Watch for Litecoin's price action and MEIP's 7/22 closing date for the PIPE as key catalysts.