There were a very large number of call options bought today - 1,700. One call option allows you to buy 100 shares of stock at a set point.
If you run an institutional fund, it can be hard to buy big blocks of stock without moving the price. One way to do so is to buy options before you start buying stock. That way, if the stock starts going up, you are assured of at least getting 170,000 shares at $34 (assuming this was one buyer).
Keep in mind, I was just guessing here. If the price of NPS stock stays below $34, the options will be worthless. Don't forget - for every buyer there is a seller. So someone is taking the opposite side of the bet, thinking NPS won't rise.
We just don't know. But big purchases/sales of options can be a good indicator that something is up.
PS - don't EVER play with options until you've been investing for a long time. Good way for the average investor to get fleeced.
Anyone who thinks GALE or DARA is a company to emulate hasn't been in biotech very long - or know what they are talking about.
Second point - you don't think investors should wait four years to go from the current market cap of $3.4bn to $12.4bn. Um, ok - that's a 38% annualized return. I guess your day trading must be going well if you can't be bothered with that sort of return. Well, good for you. But why don't you come back in a few years and we can talk again.
This is a volatile stock - key is not to get too excited by either the ups or the downs.
I'm not big on aphorisms, but Jesse Livermore was right in the 1920s when he said, "Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn."
Of course, maybe I am wrong! Would love to hear some shorts explain why they think the company isn't worth its current market cap.
Probably not. Vanguard owns more than 5% of a lot of companies, because it has so many funds and is so big.
It's a very volatile stock, so it's impossible to say with any certainty why it moves up or down any particular day. If you think (like I do) that Gattex is a real drug, and Natpara is likely to be a blockbuster, then the stock is still really, really, cheap at these levels.
I'm pretty much all in (13,000 shares and ton of long-dated calls) so keep in mind I may simply be biased.
If stock goes green today, will you push thumbs down on your own post? Would that be baboon like?
They are an orphan drug company (sell a drug for patients with ultra high cholesterol). They were just subpoenaed over marketing and sales. I don't think this has any bearing on NPS (totally different indications etc) But I suspect all the orphan stocks may take a hit tomorrow - I might buy some more if the price drops enough!
Good catch! Of course, they say "about $180m" so that does't mean they are cash flow positive. Could just be rounding. But no milestone payments etc, so looks like they are already break even. That's better than Biomarin - wow!!
Agreed - volume much heavier than normal (so far today). Always amusing to watch big capital and how many fund managers follow trends.