I guess maybe 2015 would be more prudent because we don't know about the timing. Right now I see the January 2015 calls with the following strikes: 2 strike going for 1.24, 2.5 for 1.11, 3 for 0.96, 3.5 for 0.94.
I am inclined to buy the 2.5 strike. I believe MNKD will run to 5 or 5.50 within 1 year, and the 2.5 strike would probably go from 1.11 go to about 4 or 5. Thoughts?
I would go with jan 15 $2 strike
I expect stock to hit $5-7 before pdufa so intrinsic value alone on the jan14 2 strike will be around $4 but I expect they will be worth around 6- $7 when including the IV
I expect the stock to hit $12-14 with approval (spike) and thus those calls will be worth $11 (using a $13 mid pt range spike approval)
Thus I see a 5-6 bagger on the jan 15 2 strike calls before pdufa
and a 9 bagger if one holds and sells right after approval
i would definitely buy the calls over the actual stock as stock u get 2.4 bagger before pdufa and 5 bagger with approval so get twice the return with calls and no more downside really as think about it, if mnkd either doesnt get favorable phase 3 or doesnt get approval then it goes to $0 so investing the same amountn og $$ in either calls or the stock results in the same downside.
Well, it is not necessarily $12 if approved and zero if not. There could be a delay - FDA needs additional data or explanation etc. - in this case the PPS could be around $2 when your options expire worthless and appreciate on approval or good news right after that. There is no magic formula to calculate which option is the best buy etc. If you have stock you can keep selling OTM covered calls as we go and lower your share price. Crystal ball for Jan 2015 stock price would be nice to have.
Over the past few weeks I have accumulated 1500 Jan 15 calls at an average price of .59 cents. Hopefully, I am not too early...I think they should be worth 3 or 4 dollars before the PDUFA in Jan/ Feb 2014. I think the stock price should be around $7.50 or so around that time...
See, that's what I'm talking about. This is a binary event type deal. it's clearly a "balls to the wall" type of play. I am going for broke on this, putting about half of my funds in the calls. Either they go to 0 and I am hurting, but just prolongs retirement, or they go for 300% and I am headed to the beach for a long time. I'm surprised the 2015 calls can be had so cheap right now, I guess there's just a lot of pessimism out there. I know the risk is high, but I'm going for it big time. Big time! Going to be a fun ride (I hope)!
I went for a combination of Jan '14 3.5 strike and Jan '15 2.0 strike. My forecast is a bit more optimistic than yours for end of 2014 but I see it about $5 for EOY 2013.
Sentiment: Strong Buy
Thank you. What is your purchase price on those? I kept waiting for a pull back to buy but stock has been very strong. I do not plan to hold through the FDA decision, I am hoping for a big run up prior to it so I can sell just in case they get denied. I know I would miss the big run if they get approved. I like the 2015 rather than 2014 because I think the approval or denial will be after June 2014 expiration. I am hoping for a 3 or 4 bagger on the calls.
If you are buying the 2015s just go with the 5 strike and get as many calls as possible because Afrezza gets approved and launched by then, the stock will be in the 20s. The drug will be a blockbuster. The 2014s are riskier because it still won't be approved by then and you have no idea how the market will react to the data in August because you can never predict what the FDA is going to do.
Yes I agree with you. The 2014 is much higher risk. At this point we have no way to know whether a decision would be made prior to the 2014 options expiration. I'm torn on the strike price though. My plan is to sell most of my calls before the decision, realizing that I will miss some upside. I am trying to play this as a PDUFA run up play, hoping the stock goes over 5 or 6 before the decision. So maybe I should buy the stock instead. I don't know, it's not an easy decision. I think the 5 strike price is too high given my plan to sell earlier, I am looking at probably the 2.50.
Sentiment: Strong Buy
The 2015 without a doubt. Volatility/beta will be the biggest profitable part of those calls if u sell pre-pdufa. Share price could stay where it is now and those calls would double or triple as we near pdufa.