Recent content by AngusP

The Hoadley Model is still a brilliant free tool IMHO. As far as I can see it still does everything the previous versions could do, but to use the new premium features you need to buy the add-in for a one-off $55 AusD - about $39 USD - still a steal.

Mav - underlying was at $14.43 (close on 27th April). HD - looking at the figs, there was an IV crush on the longs, bought with IV of 290.8% and which fell to 256% after the announcement. The IV of the short 15's were sold at 286%, but is shown as 370% on Friday following the leak, and...

HD - I think your last missive may have crossed with mine showing the 15/10 backspread. As I mentioned earlier - no criticism of Mav (or anyone else) intended - I just want to get a handle on these types of trade.

......... and on Monday (announcement day) profit would have been minimal (below $5.70 only) due to the IV crush. And there is still the very high risk of significant loss in the event that price moved a smaller amount. So based on the payoff, no profit even on a halving in price, and only...

Now looking at the 15/10, this could have been placed for a credit on a 1:2 basis. But there would have been a small loss on Friday (pre-announcement) ..........

HD - I placed the long strike at 15 (ATM), which is where losses are maximised, on the basis that this was the price that GNTA was least likely to be at after the FDA announcement. Turning to the 15/12.5 for a moment, you'd have needed to sell 3 and buy 4 if the backspread was to be placed...

.... and if you had waited until yesterday to close, the IV pulled in dramatically and you would have only got a profit below $8.30, which as it happens was not a problem. The downside is that if the announcement had been a non event the IV crush would have ensured very significant losses...

Been looking at some payoff's based on placing a ratio backspread on 27th April. Best compromise I can find is a 5:3 using the 15 and 20 strikes. Prices shown are based on eod - you may have done better by legging in during the day, or worse of course. :) I think this shows the dilemma...

Thanks Mav. I guess also that by playing the downside there is less risk of an IV crush - there was little with GNTA - and if the stock rises, then you have the credit in the bag and the IV crush doesn't matter.

Mav - the terminology seems to be different between the US and the UK. I'm guessing you mean a ratio backspread - i.e. sell 1 ATM put and buy 2x OTM puts, rather than the UK definition of a backspread which is equal nos of longs and shorts? I see the sense of what you're saying, but...

Would anyone consider selling the May 5 puts here for 0.5? If excercised, it discounts share purchase down to $4.50 which is a price not seen since Dec 1999.

Yeah! Right! I consider myself F'd :( :eek:

Bad luck ktm. Beginning to wish I hadn't opened the thread - sorry guys. $8.16 as I write so something will have to give 'cos at this rate the co will cease to exist by today's close.

Having sat on the sidelines and watched OSIP and GNTA, I don't think there is anything now that would persuade me to take a position in a bio-tech. Just pure speculation!

GNTA has IV that makes OSIP look like a dullard - around 260% for ATM calls. Press call for 08:30 tomorrow. I can't stomach paying that much for anything. Any ideas on how to play this? Currently standing aside.