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American Capital Agency Corp. Message Board

  • arwen_imaginary arwen_imaginary Jan 8, 2013 10:01 PM Flag

    option play on biotech..

    I like dndn. I think it will have a huge 2013. I am buying shares but would like to add an option, to be honest i have a hard time finding one .For expense purposes it must be around $1. don't ask why please. Only a few to choose from , please help, thanks.
    In biotech s and at current value i also like exel, cytx, acad .

    diversification always good fellows .

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • I made a lot of money with dndn in spite of the shorts goal to destroy the company, and they are still working on it(30% of the float is short now). If you know the history of dndn the shorts managed to cause a flash crash when dndn announced the results of their trial, taking out all the stop losses down to below $10 from about $25. I know this thread is OT but if you want to speculate with a stock that is less then the dndn options do some DD on INO. could be a big winner this year.

      • 2 Replies to jp4553
      • I, too, made a lot of money w/ dndn. I traded in and out of dndn (stock) for a few years, always to the long side. I finally struck pay dirt @ earnings in Aug, '11. Puts were extraordinarily cheap for the volatility of a biotech going into earnings. Bought 200 Aug 30 puts @ 0.29 on Aug 1 when the stock was @ $36. Earnings were reported a/h on 8/3, and the stock collapsed, opening the next day (8/4) around $12. Sold the puts for $18.35. If DNDN ever recovers, I plan to be back on the short side.

      • Jp:

        I remember that flash crash in DNDN well. But the problem with DNDN now is poor margins based on the cost of the autologous technology.  After the restructuring is completed, they'll need $100 million per qtr just to break even.  

        Even so, big pharma will eventually make a bid, probbaly from a generic producer who wants to expand.  If the bid comes, it will happen in 1H13. Probably around $8-10.

        In the long run, as the medical value of autologous therapies become mainstream, someone will start a cell banking/processing enterprise with the view of driving costs down.  Its a problem of logistics, scale and critical mass.  Intrexon might be the one to address the problem as they have a visionary at the helm.

    • OK Arwen, I'll bite,

      Now, let me preface by stating, IMO, DNDN looks like a cross between "Boom or Bust" and "Dogs of Biotech". Having said that, I assume you are Long, not short, and want a bullish play in options for one dollar or less. You said for "expense purposes". How about time horizon, Calls, Short Puts, Spreads?

      No matter, if I thought DNDN was going to play up to 8.00 by August OPEX, I would definitely play the August Bull Call Spread 5's over 8's @ 1.05 or better. That places your BE @ 6.05 with a potential 1.95 profit(almost 200%) @ 8.00 or better @ Aug OPEX.

      This limits the upside if DNDN runs to 40.00, to a max 1.95 profit, though. If that is your thought(boom) I would just buy the Aug 6.00 Call for 1.05. Cheap insurance, although a thrown away dollar if PPS @ Aug OPEX @ 6.00 or less.

      Good luck,

      DocReits

      BTW, I loathe diversification. IMO, Rule #1 is "trade what you know intimately" . The rest of the rules are a re-read of rule #1...;-)

      • 2 Replies to reits_r_us
      • to give you a more specific answer on the spread, it is very good BUT i don't think it can go up that much that fast due to overall market condition , i fear the markets deserve a Nice and juicy correction that would cost me bucket loads. :(

      • yahoo ate my first and longer post.

        First, thanks for taking the time.
        I only used spreads once with gdx, it worked out ok. I does limit your potencial gain.

        I chose the august one also.
        For some reason i am able to be patient this year and not pull the trigger on my 42% cash position. I already have to much risk and a tad too complicated(to much diversification).
        I don't think that stock is ideal to risk an option, i will wait for a market correction and then get some comon stock.
        Can't go more simple than not doing anything...sorry if i wasted your time.
        I will post ALL of my trades this year to you. Don't know why, but i will maybe because you toook a bite.
        I am SURE we will both learn something, i have slightly different ways of doing things, including expressing myself, too outspoken. Not saying you will learn more at all.

        i want to get bashed on my actual portfolio so here goes part I
        lol, i know i won't get bashed on at least one.

        x2 is double position more or less.

        tot x2, bp, aapl x2 ,fte, ftr, agnc, arr, phys, pslv, clf, gdxj, gdx x2, vale, ve,

        tiny position in gm , cytx , and tiny nok option.

        I am looking for covered calls for gdx,vale,ve and tot , i can' on the others..

        part II is more complex lol.if you're interested i'll tell.
        Gl.

 
AGNC
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