Replimune Group Skyrockets 84.13%—Is a Volatility-Driven Rally Unfolding?

Summary
• REPL surges 84.13% to $6.905, reversing a 75% plunge after FDA rejected its BLA
• Class-action lawsuits and regulatory scrutiny dominate headlines
• Options chain sees 132.75% implied volatility on calls, 304.72% on puts
• Turnover spikes 183.09% as short-term traders flood the market

Replimune Group (REPL) is experiencing a seismic reversal in fortune, with shares surging 84.13% intraday after a catastrophic 75% drop in early July. The stock’s sharp rebound follows a deluge of legal and regulatory developments—including multiple class-action lawsuits and a complete response letter from the FDA. Traders are now scrambling to position for volatility, as the options market reflects extreme skews and leveraged gamma exposure.

FDA Rejection and Legal Storm Trigger Volatility-Driven Rebound
REPL’s dramatic 84.13% intraday surge stems from a confluence of short-term trading dynamics and regulatory fallout. After the FDA rejected Replimune’s BLA for RP1 in July, shares plummeted 77.24% to $2.81. However, the subsequent flood of class-action lawsuits—filed by multiple firms including Bleichmar Fonti & Auld and Wolf Haldenstein—has reignited speculative interest. Traders are capitalizing on the stock’s oversold RSI (26.20), wide Bollinger Bands (Upper: $16.13, Lower: $1.04), and the sheer volatility of a stock trading at a 52-week low of $2.68. The move reflects a classic short-covering rally amid legal uncertainty and a lack of catalysts for further downside.

Biotechnology Sector Quiet as Legal Drama Drives REPL Alone
The broader biotechnology sector remains muted, with Amgen (AMGN) trading down 0.43% despite being the sector leader. The divergence highlights REPL’s unique position as a speculative, high-beta play amid regulatory and legal turbulence. While peers like AMGN focus on stable earnings and drug approvals, Replimune’s stock is being driven by short-term options flows and legal developments rather than fundamental sector trends.

Options Gamma Playbook: Leverage the Volatility with High-Delta Straddles
• 200-day average: $10.81 (far below current price)
• RSI: 26.20 (oversold)
• MACD: -1.62 (bearish), Signal Line: -0.71
• Bollinger Bands: $1.04–$16.13 (extreme range)

REPL’s technical profile screams volatility. The stock is trading near its 52-week low but has surged past its 30-day MA ($8.88) and 100-day MA ($9.14). With RSI in oversold territory and Bollinger Bands at their widest, the setup favors short-term gamma-driven options strategies. The options chain reflects this, with high implied volatility (132.75%–304.72%) and leverage ratios (4.98%–10.52%).

Top Option 1: REPL20250815C7.5
• Call Option: Strike $7.5, Expiry 2025-08-15
• IV: 149.37% (high volatility)
• Leverage Ratio: 7.86% (moderate)
• Delta: 0.5616 (mid-range)
• Theta: -0.0362 (rapid time decay)
• Gamma: 0.1637 (high sensitivity)
• Turnover: $287,860 (liquid)
• Price Change Ratio: 1800.00% (extreme)

This call option is a high-gamma, high-liquidity play. The 149.37% IV and 0.1637 gamma make it ideal for a volatile rebound, while the -0.0362 theta ensures rapid decay if the move stalls. With a 7.86% leverage ratio and $287,860 turnover, entry and exit are feasible even in a fast-moving market.

Top Option 2: REPL20250815P7.5
• Put Option: Strike $7.5, Expiry 2025-08-15
• IV: 154.89% (extreme)
• Leverage Ratio: 7.47% (moderate)
• Delta: -0.4360 (short-side exposure)
• Theta: -0.0181 (slow decay)
• Gamma: 0.1577 (high sensitivity)
• Turnover: $994,080 (highly liquid)
• Price Change Ratio: -74.29% (sharp)

This put option offers asymmetric protection against a potential reversal. The -0.4360 delta and 0.1577 gamma provide strong short-side exposure, while the 154.89% IV ensures the contract remains responsive to price swings. The $994,080 turnover confirms its liquidity, making it a viable hedge in a volatile environment.

Payoff Projections:
- Call (7.5 strike): A 5% upside to $7.25 yields $0.75 profit per contract, with breakeven at $8.25.
- Put (7.5 strike): A 5% downside to $6.56 yields $0.94 profit per contract, with breakeven at $6.56.

Action Hook: Aggressive bulls should target REPL20250815C7.5 into a break above $7.5; short-sellers may consider REPL20250815P7.5 if $6.5 retests as support.

Backtest Replimune Group Stock Performance
Replimune Group, Inc. (REPL) experienced a significant intraday surge of 84% on July 30, 2025. While this impressive movement is certainly noteworthy, it is essential to analyze the factors contributing to this surge and assess its potential sustainability.1. Clinical Trial Advancements: The IGNYTE trial's progress has been a key factor in Replimune's recent optimism. Despite the FDA's rejection of the RP1 biologics license application, the company's advancements in melanoma treatment have garnered attention, particularly JPMorgan's increased price target, which reflects confidence in REPL's potential.2. Organizational Changes: Replimune's strategic move to award equity to new hires aligns employee incentives with company growth, a positive signal for long-term development.3. Investor Sentiment: The surge reflects heightened investor confidence, influenced by anticipated trial outcomes and past performance peaks. However, it is crucial to monitor these factors' translation into sustained growth and profitability.In conclusion, while an 84% intraday surge is undoubtedly impressive, it is vital to evaluate the underlying factors driving this movement. Investors should consider the clinical trial landscape, organizational developments, and investor sentiment, keeping in mind that past performance is not always indicative of future results. The company's ability to translate momentum into long-term growth will be critical in maintaining investor confidence.

Volatility Peaks—Act Now or Miss the Gamma Window
REPL’s 84.13% intraday surge is a textbook volatility-driven rebound, fueled by short-covering and options gamma flows. While the stock remains below its 200-day MA and faces a 52-week high of $17, the immediate technical setup favors a continuation of short-term volatility. Traders should monitor the 200D support ($12.02–$12.26) and 30D resistance ($9.29–$9.49) for potential reversals. The sector leader, Amgen (AMGN), is down 0.43%, underscoring REPL’s unique speculative appeal. For those with a high-risk appetite, the REPL20250815C7.5 and REPL20250815P7.5 options offer a leveraged play on the stock’s extreme volatility. Watch for a breakdown below $6.5 or a regulatory update—either could trigger a swift reversal.