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rathcoole_exile · #1 03-05-2007, 00:56

have any market watchers got an opinion on GM ? will they break through the $32.50 resistance anytime soon you think ? it's drifted up and bounced off it twice in recent days, looks like it will either stay in current range or burst through on an upwards breakout.
I've got my exit strategies in place so I'm not too concerned, but I'm Short the May 30 naked Put (looks safe) and also short the May 3250 naked Call, so obviously I'd prefer a sideways movement for the next 17 days.
just wondered if any BMs have opinions or insight ?
btw, what's up with Dendreon (DNDN) ? they spent the last year languishing around $2, now they are suddenly up to over $17 !!
the May 750 Put is paying around 11% ! incredible. but the exchange have taken a dim view and it's not marginable, have to be fully backed up, so I left it for now. but it's an interesting one to keep an eye on ....

Rex7777 · #2 03-05-2007, 10:17

I'm not a big fan of the GM cars (except Corvettes) and so I don't like the stock. Right now I'm holding 2K DNDN shares. We'll have to see what happens - FDA approval or just an approvable letter. If the FDA approves, the stock is probably worth a lot more than its current price. And yet, there's a huge short interest, or so it seems. It's going to be a fun ride. The FDA should rule on or before May 15th.

Rex

rathcoole_exile · #3 03-05-2007, 10:52

it's funny, i can remember Writing DNDN Puts at around 1000 or 1250 a couple of years ago. Luckily I never got assigned before they bombed. Then I took my eye off them for a long time while they were lower than Gollum. But this sharp rise on the expectation ("hope"/"prayer" ?) of FDA approval still doesn't match up with the company fundamentals. There is a helluva lot of future earnings and dividends built into that 1700 price; I hope for your sake it works out. I'll be keeping an eye out to see if there are any Writing plays, but maybe I'll wait until the stock is marginable.

Rex7777 · #4 03-05-2007, 11:13

Yeah, DNDN is perhaps a crapshoot. They say, though, that there's a huge market for a product that's effective against prostate cancer. Almost a billion dollars in the USA alone in a few years. Same for Europe. Right now, there's not much out there to treat it, except Taxatore, which is apparently not too pleasant and doesn't work that well anyway. We'll see what happens. Maybe I make some money.

Rex

PeterG · #5 03-05-2007, 14:48

Quote:

Originally Posted by rathcoole_exile

have any market watchers got an opinion on GM ? will they break through the $32.50 resistance anytime soon you think ? it's drifted up and bounced off it twice in recent days, looks like it will either stay in current range or burst through on an upwards breakout.
I've got my exit strategies in place so I'm not too concerned, but I'm Short the May 30 naked Put (looks safe) and also short the May 3250 naked Call, so obviously I'd prefer a sideways movement for the next 17 days.
just wondered if any BMs have opinions or insight ?
btw, what's up with Dendreon (DNDN) ? they spent the last year languishing around $2, now they are suddenly up to over $17 !!
the May 750 Put is paying around 11% ! incredible. but the exchange have taken a dim view and it's not marginable, have to be fully backed up, so I left it for now. but it's an interesting one to keep an eye on ....

GM:

your written puts look pretty safe and highly probable that you can keep the premium.
Reading the barchart says range bound move and sideways bias. Weekly line chart in case of a close above 32 (Fridays close) is anticipating a strong next week leading to prices above 34 which means that your short calls are pretty hot. You can avoid a sleepless weekend by getting long June 35 calls to hedge your May calls.
Need to calculate your current risk and determine your positionsize of course.

rathcoole_exile · #6 05-05-2007, 01:19

i've taken the plunge on dndn and gone short up&down, straddling at 1000 & 750 on the naked put side and 3500 & 4000 on the naked call side (stock at 20.52 at present)
it's going to be interesting 2 weeks, but with a breakeven range between low single figures and high forties, I'm quietly confident.
famous last words .......?

Rex7777 · #7 05-05-2007, 12:09

I've never really fooled around with options. I either own a stock or I don't. In the case of DNDN, there are huge amounts of money at stake, all riding on the outcome of the FDA decision. The people on the short side, including some hedge funds, are getting desperate, as they have a lot to lose. Right now, the stock can't be shorted; there's none to borrow. Some brokerages are raising their margin requirements on the stock so that calls can't be exercised without $$$. I'm betting on a approval, but with my luck I'm probably wrong. If the FDA approves, it's a $50 stock, maybe more. If they only issue an approvable letter, the stock could drop back to the single digits.

Rex

marc26 · #8 06-05-2007, 03:21

Quote:

Originally Posted by Rex7777

I've never really fooled around with options. I either own a stock or I don't. In the case of DNDN, there are huge amounts of money at stake, all riding on the outcome of the FDA decision. The people on the short side, including some hedge funds, are getting desperate, as they have a lot to lose. Right now, the stock can't be shorted; there's none to borrow. Some brokerages are raising their margin requirements on the stock so that calls can't be exercised without $$$. I'm betting on a approval, but with my luck I'm probably wrong. If the FDA approves, it's a $50 stock, maybe more. If they only issue an approvable letter, the stock could drop back to the single digits.

Rex

what other drugs do they have in their pipeline?
these one-pony bio's get demoilshed if they get negative news

Rex7777 · #9 06-05-2007, 08:34

Pipeline:

Dendreon: Lapuleucel-T

It's my understanding that they have a patent on the technology used to produce the prostate cancer treatment, and that that same technology can be used to produce treatments for other cancers, such as breast cancer. In any event, if Provenge gets the green light, they'll have the money to go forward with the other trials.

Rex

rathcoole_exile · #10 09-05-2007, 21:21

Rex,
dndn back down to just under $8 on news that the FDA have requested further data though I can't see if any delay to the 15th May decision has formally been announced.
closed all my naked 3500 & 4000 calls (sold for $1.95 @) at $0.05 for lovely profit :-), but I am sat with 1000 naked puts :-(
If the share price doesn't bounce back, I'll close out probably even money.
I also bought some 500 puts just in case the price totally bombs and I'll try to pick up a few $ on the way down.
I hope you're still holding your stock above your breakeven, or did you manage to ditch them for a healthy profit ? Fingers crossed for you ...

marc26 · #11 09-05-2007, 21:34

Quote:

Originally Posted by rathcoole_exile

Rex,
dndn back down to just under $8 on news that the FDA have requested further data though I can't see if any delay to the 15th May decision has formally been announced.
closed all my naked 3500 & 4000 calls (sold for $1.95 @) at $0.05 for lovely profit :-), but I am sat with 1000 naked puts :-(
If the share price doesn't bounce back, I'll close out probably even money.
I also bought some 500 puts just in case the price totally bombs and I'll try to pick up a few $ on the way down.
I hope you're still holding your stock above your breakeven, or did you manage to ditch them for a healthy profit ? Fingers crossed for you ...

there are some institutional holders in this name
its only an hour into trading, could lean on this stock getting out of it
these one horse drug stocks dont bounce back too easy

rathcoole_exile · #12 09-05-2007, 22:35

yeah, although I'm short at 1000P, this evening I went long the 750P & 500P.
The 750P is already showing a slight profit.
If the share price continues to crash and the value of my 750 and 500 increase, i should be able to close out at about even on the downside, having maxed out nicely on the upside naked call write.

I still can't understand Rex's hostility to Options - someone who bought dndn last week at 1800 is sat on a 1000 loss with potential to lose all 1800. his potential upside, if the stock had doubled to 3600 was obviously 1800.
Whereas an options trader, someone who bought the 1500 call option last week has lost just the 560 premium, but had the potential for a profit of 2100

what makes more sense 1800v1800 or 560v2100 ?

Rex7777 · #13 09-05-2007, 23:19

Well, I guessed wrong on DNDN, or so it seems. The whole situation is rather strange, though. According to the company, the FDA wasn't entirely clear on what additional data would be required. But normally, the FDA is very specific in a CR letter. I'm holding the stock to see what happens next. Perhaps the additional data request can be satisfied in a few months. If not, I'll hold the stock anyway. Maybe they'll be bought out. I'm not out much real money at this point, although I'm down $20K paper profits from yesterday.

Rex

marc26 · #14 09-05-2007, 23:40

Quote:

Originally Posted by Rex7777

Well, I guessed wrong on DNDN, or so it seems. The whole situation is rather strange, though. According to the company, the FDA wasn't entirely clear on what additional data would be required. But normally, the FDA is very specific in a CR letter. I'm holding the stock to see what happens next. Perhaps the additional data request can be satisfied in a few months. If not, I'll hold the stock anyway. Maybe they'll be bought out. I'm not out much real money at this point, although I'm down $20K paper profits from yesterday.

Rex

again, these bio's with very little else in the pipeline will get crushed at the slightest bit of less than positive news