I have had success buying stock and selling calls based on positive results for upcoming events. In my experience, the hype surrounding the release of the results seldom translates into the type of dollar figures that the long-term shareholders hope they will see. I like to minimize my risk as much as one can in this sector. I made some nice premiums this month, which basically offset the decline in my underlying stock. Since I'm not in the business to break even, I have to reassess February and determine my strategy for this coming week. A quick note of thanks to RIMM for making the month for me.
I expect the Phase III results to be positive but it is hard to imagine that those results alone will drive the stock into the stratosphere, as some on this board seem to be touting. As a 'one-horse wonder' company, the general consensus seems to be that unsuccessful results will push the stock to the $2 range, meaning there is already $5 worth of hype built into the stock. I think it reasonable to assume that a fundamental movement to $10 is warranted based on the increased, albeit untapped value of the company. However, successful results open the door to partnerships or a potential takeover which will have a separate effect on the stock price.
Assuming there is no actual agreement announced prior to OE in February, the stock price should be the fundamental $10, plus another couple of bucks for 'partnership' hype. so $12 per share seems to be a reasonable strike price for Feb.
Things don't work in a linear fashion, so it is quite possible that a positive announcement might drive the stock to a high of $13 or $14 in the short term before profit taking sets in. One might gamble that the scramble of shorts covering and buying from investors with a longer outlook than my month-to-month view, will create such a bubble. If so, that will happen quite quickly and I may hold off selling calls until then.
If this works as I hope, I'll retain my shares with Celsion in the $11-$12 range in February. We'll have to see at that point what the possibility are for March.
You guys are getting old. Your "one horse wonder" comment typlifies the ignorance of the "I think I am a hot trader crowd" by coming through here, saying blah blah blah blah blah and not knowing F all about Celsion. Do your home work son.
You can throw your projections out of the window... has anyone ever projected SRPT to fly to 42$ after closing at 14? has anyone ever projected ACAD to open at 6.5$ after closing on 2.3$ ? you cant possibly know the effect of short squeeze and/or sidelines investors\institutions reaction.
11-12 is possible after profit taking (a-la SRPT) but i estimate 14$-16$ FEB OPEX with anywhere between 16$-25$ opening in the case of positive results.
Binaries of ALL or NOTHING usually ends with an open price of -90% or +100%...
after that your guess is as good as mine
We should use MDVN as a example of trading action for
a blockbuster drug with strong PIII data and high condidence
FDA approval. SRPT is not good one to compare to CLSN,
if SRPT results were PIII data with approval 80+% in the bag,
SRPT will open at $40 and trade up to $60, a $1.5B market
cap first day, just like MDVN had on Nov3, 2011. With strong
HEAT data, market will sart to price in CMLC and breast cancer
$1+B market potential. In my view, CLSN is in a much
better position than MDVN and SRPT in term of their drugs
expanding into other cancers. As I said here before,
once Thermodox is approved, the off label use will off
the charts, rival Avastin, which one time more than half
of $5+B sales was from off label use.