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Cyberonics Inc. Message Board

  • hirsct hirsct Jun 6, 2004 4:16 PM Flag

    Likely Scenario

    Here's the way I see 6/15 playing out. The panel will neither endorse nor reject. It will recommend to the FDA more testing before the October vote of the entire committee. The bloated option premiums are anticipating volatility which won't materialize. I've made 2 trades that reflect my view: 1) I sold 10 June 25 calls @ 2.35 and pocketed $2350. 2) I bought 500 shares @ 19. My cost basis for the shares is 14.30. My breakeven on the top side is 35. Even if the panel votes for unanimous approval, how much can I get hurt being short 500 @ 35? Does anyone see this gapping to 40 on the news?

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    • Your analysis looks possible to me.I feel your OK on the upside although don't think I would sell the 25 calls.{just me}Thats why I sold the 35. s---t happens and usually to me.I think your most exposure would be on a downside surprise.If there was a 10 put available I would have put om a 12.5-10 bull put spread.So instead long stock and sold 12.5 call.if stock finishes above 12.5 profit of about .75.Not a home run but not too bad for 2 weeks.

 
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