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ACADIA Pharmaceuticals Inc. Message Board

  • dzennett dzennett Aug 15, 2013 8:52 PM Flag

    Need honest opinions on my Acad call option

    Hi all,
    I invested quite a bit money in Jan 15 option strike price of 37 Premium 1.50
    Should I be patient and let it run its course?? or Should I sell it to be even?
    I feel like Acad is running out of steam and I think eventual approval of Pima is already partially priced in the current stock price but there's always a possibility of a buyout..

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    • dz-sounds to me like your a gambler whos looking for a quick fix.....its like betting only on proposition bets during super regular shares sit back and enjoy the sound like a complete freaking idiot to me when you say- I feel like Acad is running out of steam and I think eventual approval of Pima is already partially priced in the current stock price..... a fool and his money are soon parted......

      Sentiment: Strong Buy

    • If you plan to invest in options, you should read "Options as a strategic Investment" and then start smaller to learn before you get burned. IMO, I would not own this option, I prefer to buy in, or near the money with some time for appreciation, which you have and then maybe sell a higher price call to reduce the overall cost of the position (call spread). You could also sell a shorter term call calendar spread. I generally prefer to sell options (calls and puts) more than buying them.

      • 1 Reply to bioimmunomabman
      • Bioimmun
        I sold put options against ACAD from $6.00 - $18. but selling puts limits your gains to a finite number and still carries risk . Buying 2015 Leap Options on a Bio company that set to be approved in 2014 is a good risk trade. I bought the same expiration but on the $17. calls when ACAD was at $12.00 and manage to catch a quick 6 pts. I did sell enough to pay for the trade but will hold the rest threw expiration. GL2ALL

    • I am holding the Jan 2015 $17.00 calls. The reason you buy leaps are to give the underlying security time to mature. With your strike price being that high you are planning on a buy out, or more positive data on Pima, Either one is a very good possibility so unless there is something going on that your not mentioning? Then Hang in there. I trimmed my positions way back but ACAD was not one of them.

    • The long-term prospects of ACAD reaching $38.5 (your break-even point) are high but, as you've noticed, the stock is struggling in the short-term. If it slides down to, say, $14 your calls will take a hit and you will face emotional pressure to sell them. So, it depends on how strong a stomach you have.

    • If you're going to worry about the options and not be able to sleep, then chances are you should not have been in them to begin with. This company has many things working in it's favor. Things are going to take time to work out. We could get news at any time. If you are not in the stock at all, you will lose out. It looks like we are building a good base to move higher from here, but the building could take time. If you need the money thats one thing, but if you sell and are out, you can lose bigtime. Options are funny animals and not for everybody. You purchased far out of the money strikes that have no intrinsic value, strictly a gamble. I feel the stock will start to move up well in advance of the NDA, therefore I want to be in the stock now. There will be no warning. One day it will be up and you will wonder why. This is my opinion. Good luck to you.

      Sentiment: Strong Buy

    • If your going to worry about your options for another year plus then sell.

    • I have bought calls off and on in ACAD for almost a year now...IMO you may want to let those ride....the market value of Pima is not in this nor any of the other off label stuff----hang tight say I...i have some Sept 15 coming due here--say those rise to 6.00 now back to 4.90---i more than likely will exercise those and pick them up at a cost of $17.xx and then just hang on til buyout

    • So you need the stock to be above $37 to be in the money, correct? By January 15 2015. Although if it gets close to that you could sell the option for a huge profit. Thinking this through ACAD that price of $37 implies a market cap of $3.2B. For that to happen investors will need to see an 1) NDA filed for pimavanserin in 2014, 2) believe - as I do - that the Parkinson's psychosis market is a $1B+ opportunity, or 3) if investors do not believe the PDP market is as big as I do, then pimavanserin will need promising data in Alzheimer's or as an adjunct in schizophrenia.

      I think all this happens and we are looking at a multi-billion opportunity here. Psychiatrists and patients are in great need for antipsychotics with novel non-dopaminergic mechanisms. All antipsychotics carry an FDA black box warning of increased mortality in the elderly (imagine if pimavanserin avoids the black box or provides a delay in patients need for admission to a nursing home), dopamine blocking drugs cause EPS and TD (which should be relatively contraindicated in PDP patients after pimavanserin is approved), their effectiveness is
      mixed (so there is a role for adjuncts). This is the bull case but seems intact so far. In 12-18 months, I think we will have a $30+ stock.

37.97+0.19(+0.50%)Feb 27 4:00 PMEST

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