Looking for some options to take advantage of positive results.
I think Apr options are too risky if they don't report by then. Been looking at June 2 or 3 $ calls. A bit expensive, but the pps should clear at very least $5 on good results.
Thoughts? I'm relatively new to options.
I took this statement as meaning the poster wanted to mitigate his risks.
"Not sure I want to hold any KERX shares through data though (bc I have a lot AEZS, I don't want a trial failure to be catastrophic). "
I figured you understood the option play, just that others may not have and how the vertical call spread mitigates risk and is a decent play in order to balance the profit versus risk in a trade. I figured if he was willing to put up $1.45 to buy the calls but that $3.25 to buy the stock was too risky, that maybe the vertical call spread would be a better choice.
I certainly wouldn't just buy the $3 call for $1.45, I'd buy the stock instead, but I think the vertical call spread is a pretty prudent play here. For a similar risk in dollars, the stock doesn't have to go nearly as high to gain the same profit ($5 versus $8).
Wig: I didn't get where the poster mentioned mitigating the risk of the trade only that he felt the Aprils were too close and he didn't want to risk that the results would not be released in time... as far as the option stuff goes I'm good with how that all works but thanks for taking the time with the informative example... good luck to all of us...
Fil: No Aprils... June's are very expensive, thus no real leverage... I'd be a buyer of the stock because with ownership you have a "safety" net with MM Phase III and Z... so, in theory, if Peri blows up you can still dig your nails in and hang on... in the case of Peri's success, you'll be able to ride that wave into a possible partnership or whatever and then have Z come on line and pump in a little more gas... then you have Torii step up with some serious cash... all in all, this could really be a crazy good year for the true longs, regular longs, model makers and their worshippers...
Yea I agree with you on the April options. They've said that after the trial is unblinded it will take 4-6 weeks to scrub and analyze. Now that seems long to me, but to be conservative let's say that's right. At four weeks the trial would have to be done by the end of the third week in March and at 6 weeks it would need to be done in the 1st week. The June 3's will cost about .25 more than the April 3's but you can sleep at night. I like the June 3's if you can get them at 1.45. Stock probably goes to 7 by then for a 175% return.
I have been buying the stock and selling the options because they have an incredible premium.
An example sold 10 June $5 calls yesterday for $850 profit. If the stock goes to $5 in june I will get called away but still make about $2 per share over my purchase price or almost a double on my money by June if the stock does spike.
Will probably buy more shares and hope stock spikes and repeat the process at even better profits.
The options themselves seem a bit rich to buy would stick with the stock. IMHO