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Dendreon Corp. Message Board

  • tlee22202 tlee22202 Oct 29, 2013 10:44 AM Flag

    Option Strategy for DNDN

    Here is a strategy I had recommended to some of my friends who are anticipating a 2X - 5X upside move in DNDN.

    Buy the Jan 4.50 call and sell the Jan 1.50 put. If done as a spread, your net cost should be around 0.00
    In order to minimize drawdown in case the share price drops, it is best not to go out too far in time. Just put on a new position when this one expires. The good thing is that this will cost you nothing as long as the share price remains above 1.50

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    • At the current price of 2.52, the long Feb 4.00 call and the short Feb 1.50 put spread could be done for a net cost of 0.00

      This would give you enough time to hold through the Jan earnings. When this expires, then just put on a new spread such as for May 2015.

      For DNDN, it is not worth the hassle of holding shares and watching the daily ups and downs, unless you are swing trading to make a few bucks.

      As long as they have enough cash to keep the company operating, the share price should stay above 1.50
      The only risk would be if a buyer is not found and the company goes bankrupt.

 
DNDN
2.65-0.04(-1.49%)Apr 17 4:00 PMEDT

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