STOK Plunges 14.5% Amid Biotech Sector Volatility: What’s Fueling the Selloff?

Summary
• Stoke Therapeutics (STOK) tumbles 14.49% intraday, trading at $28.09 after opening at $27.20 and hitting a low of $25.21.
• Biotech sector news highlights $5.6B AbbVie-RemeGen deal and JPM26 AI collaborations.
• Options chain shows high volatility, with STOK20260220P17.5 and STOK20260220C17.5 attracting 106 and 10 contracts respectively.

Stoke Therapeutics faces a sharp intraday selloff amid a biotech sector reshaped by blockbuster deals and AI-driven innovation. With the stock down nearly 15% from its open, traders are dissecting technical signals and options activity to gauge the depth of the decline. The broader sector, led by Amgen’s -0.31% move, remains in flux as JPM26 events and funding shifts redefine risk profiles.

Biotech Sector Turbulence and Funding Shifts Weigh on STOK
The selloff in STOK aligns with broader biotech sector jitters triggered by AbbVie’s $5.6B PD-1xVEGF deal with RemeGen and Lilly-Nvidia’s $1B AI co-innovation lab. These developments signal a shift in capital allocation toward AI-driven drug discovery and high-risk, high-reward partnerships, leaving smaller players like Stoke Therapeutics vulnerable. Additionally, JPM26’s focus on corporate enclosures of scientific data and regulatory scrutiny of dual-use genomics has heightened investor caution. STOK’s 52-week low of $5.35 and 23.57x dynamic P/E ratio further amplify its susceptibility to sector-wide risk-off sentiment.

Biotech Sector Mixed as AMGN Holds Steady, STOK Plunges
While Amgen (AMGN) declines 0.31%, Stoke Therapeutics’ 14.5% drop starkly contrasts with the sector’s relative stability. The biotech sector’s mixed performance reflects divergent investor priorities: large-cap players like AMGN benefit from steady cash flows, while smaller innovators face pressure from funding constraints and regulatory headwinds. STOK’s sharp decline underscores its exposure to sector-specific risks, including capital flight toward AI-driven collaborations and the sector’s broader shift toward de-risked assets.

Options Playbook: High-Leverage Puts and Calls for STOK’s Volatile Outlook
• MACD: 0.798 (bullish), Signal Line: 0.786 (bullish), Histogram: 0.0118 (narrowing divergence)
• RSI: 53.82 (neutral), Bollinger Bands: $30.51–$34.93 (price near lower band)
• 200D MA: $19.19 (far below current price), 30D MA: $32.23 (resistance ahead)

STOK’s technicals suggest a bearish reversal after a short-term bullish trend. Key support at $25.21 (intraday low) and resistance at $30.51 (lower Bollinger Band) define a volatile trading range. The 52-week low of $5.35 remains a distant concern, but near-term focus is on the 200D MA ($19.19) as a critical breakdown level. With no leveraged ETF data available, options remain the primary vehicle for directional bets.

Top Options Contracts:
• STOK20260220P17.5 (Put):
- Strike: $17.50, Exp: 2026-02-20, IV: 106.07%, Leverage: 90.45%, Delta: -0.0629, Theta: -0.0130, Gamma: 0.0125, Turnover: 59
- IV (high volatility), Leverage (aggressive downside exposure), Delta (modest sensitivity), Gamma (modest price sensitivity).
- This put offers 90% leverage to a 5% downside move (projected payoff: $10.55), ideal for capitalizing on a potential breakdown below $25.21.
• STOK20260220C17.5 (Call):
- Strike: $17.50, Exp: 2026-02-20, IV: 104.97%, Leverage: 2.54%, Delta: 0.9387, Theta: -0.0309, Gamma: 0.0124, Turnover: 11,050
- IV (high volatility), Leverage (modest upside exposure), Delta (high sensitivity), Gamma (modest price sensitivity).
- This call provides 2.5x leverage to a rebound above $30.51, with high delta amplifying gains if STOK recovers. Projected payoff: $10.59 for a 5% upside.

Trading Insight: Aggressive bears should prioritize STOK20260220P17.5 for a potential 5% downside, while bulls may use STOK20260220C17.5 for a rebound trade. Monitor the 200D MA ($19.19) as a critical breakdown level.

Backtest Stoke Therapeutics Stock Performance
The stock STOK has experienced a total of 495 days with a -14% intraday plunge from 2022 to the present. The backtest results show a 3-day win rate of 49.29%, a 10-day win rate of 52.93%, and a 30-day win rate of 56.57%. The maximum return during the backtest period was 11.75%, with a maximum return day at 59.

STOK’s 14.5% Drop: A Warning Shot for Biotech’s Volatile New Era
Stoke Therapeutics’ 14.5% intraday plunge reflects the biotech sector’s recalibration amid AI-driven partnerships and regulatory scrutiny. While Amgen’s -0.31% move suggests sector-wide caution, STOK’s sharp decline highlights its vulnerability to capital flight and funding shifts. Traders should watch the 25.21 support level and the 200D MA ($19.19) as key inflection points. For now, the options market favors bearish positioning, with high-leverage puts offering outsized potential if the selloff accelerates. Action: Prioritize STOK20260220P17.5 for a 5% downside scenario and monitor JPM26 developments for sector-wide catalysts.