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YM BioSciences, Inc. Ordinary S Message Board

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  • C78596998785 C78596998785 Jun 2, 2006 9:22 AM Flag

    calls

    The short position makes no sense to me... the downside is limited and the potential beyond the mid fours we visited would have een a good time to cover a short at 6... paying a dollar for risk aversion at that point would indicate a lack of conviction on the short at this magnitude and therefore the profit in hand would be more attractive...

    The options were not traded... open interest increased on the trade @5000 positions...

    My impression here is that someone long the shares considered the move to 7.50 plus the $1 premium to be a satisfactory return and sold the options to someone that considered the option a strategic play on a sizable upward move...
    win win

    The short at $6 would lose $1 premium and $1.50 on the move to $7.50 (add in the $1 that the position is in the money and the short at 6 could lose $3.50 from the current position he is in, while on a move to zero he could only gain $5... not attractive at all unless you know the outcome of the trials... and if you knew that you wouldn't need to hedge your bet!