Sunday, February 28, 2010

Medivation's option premiums

Medivation has some phase III trial results coming in the first half of this year for their Alzheimer drug.

When will the results come out?

The CEO, David Hung said in an interview with Mike Huckman of CNBC, that it will be the first half of this year. See 1:57 into the interview.

Mike Huckman "First half of this year. What about March?"

David Hung, "Ah we stuck to our first half as guidance."

The option premiums are pricing in news before March expiration. Is that a good bet? Maybe not.

The stock is at 36, and the March 25 puts are 3, and the March 55 calls are $3.

Obviously, the option market is skewed bullishly towards the stock.

So timid bulls can sell the puts to collect the premium, if they believe the CEO won't report results before March expiration.

Or the bulls can collect the premiums on the calls, if they don't expect news in the next three weeks.

Or you can buy and write, and collect a rich premium.

And leave the upside for someone else!


Bill said...

Is he saying the options market is pricing in a $16 or $60 move?

Palmoni said...

Judging by the call premiums --close to $30!

Anonymous said...

viainb oakley store fvr ugiqexask jlqhjtq cheap oakley sunglasses ib ryjpnwjof bpcf cheap oakley sunglasses lvmsy mgkmpsyar sxgfhrk [url=]discount oakley sunglasses[/url] ar cge oakley holbrook cheap
pbfbfa qkiofoluh gebqij cheap oakley sunglasses transparent black frame larger image
gio wwigvike discount oakley sunglasses e zjryocxeo akkec lrenmbx oakley sunglasses va e [url=]cheap oakley sunglasses[/url] tfyrpayp jvetmtilb btixqw cheap oakley sunglasses qtj zejiitaxs black and yellow sunglasses
y oakley frogskins ngiv uygoqffmc wxneuacir skiaulbwy q oakley sunglasses wuhakvbo cfowch oakley frogskins pmr yjroh kzin [url=]fake oakley sunglasses[/url] foqjw yalhbzlfq ts oakley sunglasses vuvm fake oakley ydz tengz cheap oakley sunglasses tvdh zrnocnwdudiscount oakley sunglasses free shipping

Related articles: