I would suggest that you take a look at the IMNX Jan. 2003 $20 LEAPS. Attractively priced in the $3-$4 range. You could establish a much larger position this way and still realize a longer term position.
IMNX looks prime for a buy out at these levels. I will be interested to see what they do to prevent this. Management at IMNX has to regain the confidence of the street at this point. Anything they say will be put under a microscope and picked apart.
With a peak of 75 and a recent price of 33, you must be following the ostrich investment philosophy. That is a 56% loss......and you defend that!
I hear the refrain ......"but it is a great company". They said that about ibm when it peaked in the past at 181 and than tanked to 41. From what you are telling me you would have ridden that one down exclaiming all the way......."but it's a great company".
Reality is neither your opinion nor mine. I do not have blind faith in IDPH. I believe in two things in the stock market - probability and outcome. I also believe that IDPH is a great company. This is based on 9+ years of stock ownership. Anyone who wants to outperform the market averages must occasionally, and I emphasize occasionally, ignore all the whirl and flutter, and stick with one's guns. I tally my reality up every night, and I know where every penny has come from and gone. The reality is that I do not believe IDPH is going to 20, absent a change in the company fundamentals. The dip into the 30's does not especially surprise me in this environment, but I expect it to be temporary. If I am wrong, I can live with this outcome. But I believe the probabilities favor sticking with this company for the long term. There are always things that can go wrong (see IMNX), and that is why we diversify.
The reality is that we can both be right, or both be wrong, because we have different investment objectives and horizons. I thank you for sharing your opinions, but I respectfully disagree.
I sold the IDPH covered calls last week, little chance the April 63 3/8's will move into the money now, so my long shares are safe and I'll probably end up pocketing the premium. I'd be thrilled if they were called away, though! I only wrote contracts for shares I'd be willing to part with at that price, Intending to renew once these either expire or hit.
Also sold August out of the money puts on another stock I own and want to add to (it's a good company and down, maybe like your IMNX and INKT), figuring worst case I own it at the strike (which is lower than the current price) minus the premium of $2/sh. Best case it doesn't go that low, I still keep the premium, and my long shares appreciate. (or at least stop going #@$%&*@ down!)
My point is to consider being an option seller rather than a buyer (since time decays options) Just make sure you can handle the outcome (ie selling at the strike or buying more if the shares are put to you). Corrchess, do you have any statistics on option players' average success rate? I'll bet it's relatively low vs sellers. Also gives you discipline over fear and greed for your buy and sell points.
Good luck and better investing
vaya con dios, de campo en baja mexico una semana
btw, corrchess, what was that Russian quote from a few days ago?
I bought the equity in my margin account instead. Let's do the option math again on shares at 11.25 or 2003 20/LEAPS at 4. OK, I can buy 2.8 LEAPS for every share. Assume an equal dollar amount invested. Here is our table.
IMNX price Jan 03 - Return on Shares - Return on LEAPs.
Margin rates are running about 8% now, so breakeven is probably close to 30 bucks per share for the two trades. So IMNX has to more than triple in two years to make it worth the leveraged play, vs. the equity buy on margin.
Corrchess_IM Does Not Fight These Kinds of Odds Willingly!