If you REALLY understand options read on, if not hit teh BACK button:
Interesting Iron Condor (IV 300+)
ITMN, waiting on an FDA decision on March 9th.
Sell the March 10 Put @ 1.80, buy the March 7.50 Put @ 0.65 (52 Week Low 10.48)
Sell the March 20 Call @ 1.85, buy the March 22.50 Call @ 1.30 (52 Week High 18.14)
Your ranges should be covered, nice $1.70 in profits for as long as it sticks to the range $10-$20. Max at risk $3.30
I said 302 bucks refund for my Bosch dishwashier, actually it was $602.75 to be exact... Don't know where that 302 came from(popped the cork too early?), but I need to correct myself nonetheless.
Looks like ITMN is charging again. I don't think it's gonna go very far, although I am holding twice as much PUTs as CALLs, both were sell of course... Guys at Wedbush Morgan is right on the bulls eye - $23! which is about the middle point of my range of $18-$27.
See how it goes next week.
Best luck to you!
1. Close the trade yields 30 cents... (If you are streched out on the $$$)
2. Sell the 22.50 at a NICE premium... (Almost +4 in gains) And wait for the TV (Time Value) of the 20 to erode (Given that it looked very toppy at 25 and 24....) Very likely you can buy it back for less than 22.50. YIELD Unknown.
3. Sell the 22.50 as above mentioned, buy the underlying security... On a dip below the 22.50 mark. YIELDS about ~1.80
Hey Mr. Brun,
Just came back from lunch meeting. Didn't want to go but can't say no to a couple of friends from Hong Kong - actually one friend with his friend.
My ITMN venture appears stable. should sleep like a baby tonight.
Let me share with you one shocking fact: ITMN March calls/puts near the money will have over 20 cents of time premium erosion per day. To elaborate, on the average from now until March 20th, which is the option expiration date, erosion of the time premium will continue EVERYDAY by about 20 cents per contract, regardless of the price movement. THAT IS AMAZING!
That's why I should sleep like a baby.
Wish you best luck!
...By the way. Right now the voltility of the options is almost extremely high. After the 9th the volitility will be at best one sided. I expect 10%+ erosion on the premium by the 9th., and, of course, the spread will not be that crazy either.
Just my 2 cents!
Best luck to you!
Hello Mr. Brun,
I had a very busy day yesterday on things at schools, which took most of my day...
This morning I found my Mar $15 calls is undewrwater by 25-30%. I did a quick research about it and concluded that the first level range is $12-$18, the extreme range is $10-$20. the mid point is, of course $15. In order to play safe I sold some Mar $15 and Mar $16 PUTs to counter the calls I wrote since I do not have the underline stock.
I would share my findings and opinions here with you.
After checked on a few drug development "startups" I decided to use the ALTH model since it is the one closest to ITMN based on several criteria: The stock movements, the volumes, the ranges, size of the firms, cash on hands, and most importantly FDA status.
As you can easily find out, if you have not already known. ALTH sold off after FDA's approval. Those who was expecting the stock to shoot to the moon took extremely heavy loss. Thos who jumpped in after the approval actually did better. If they have held for 3 more months they actually could break even. Most of them appears did not, since they were chasing fast money.
Back to ITMN. If good noews come out on the 9th. If the stock does not get sold off, it could go up by a 30% from here, which translates to about $20. However, if the news is bad. It could open at around $12, and could drift another 2 bucks, which is $10. These are cases I would consider extreme.
After quick check on my "gamble" on ITMN. I have reached the conclusion that if the extreme cases happens on either end, I will be about break even. Otherwise I could have gains from the premium erosion.
Hope my 2 cents is clear.
Best luck to you!
Lots of computer problems yesterday...
Keep in mind that March 9th is the FDA day... So you can always get the juice out of March 15s as time erodes, but be careful.... You still have room to play with time... Keep in mind it crossed that mark already....
You seem to know what's going on, so best of luck....