IC on DNDN = safer play?

R

rickf

Any thoughts about placing an IC on DNDN going into next week's FDA meeting?

I'm thinking VERY conservatively in terms of generating some possible income on this astronomical IV position, and wonder if the large "landing zone" created by an IC would be better than something like a DITM call or put spread in terms of probability of ending up in the green.

eg, A 5/7.5/20/22.5 IC gives you a pretty nice target area to have the share price land in the green at its current price (where I define "in the green" as "not losing money on this spread and hopefully profiting nicely") with an obvious slant toward the downside protection. Certainly, I could do the same thing and have an obvious slant favoring the upside, too and just move the entire spread up by a strike.

Any thoughts? Just exploring various conservative options to generate some income here.
 
UKOEC 7.30 +0.20 7.30 7.50 18,050 69,747 Trade 15.00 UKOQC 5.00 +0.50 5.00 5.10 12,317 106,733 Trade
UKOEW 6.30 +0.05 6.30 6.40 6,224 60,940 Trade 17.50 UKOQW 6.50 +0.40 6.50 6.60 21,307 39,003 Trade
UKOED 5.30 +0.10 5.30 5.40 8,050 78,856 Trade 20.00 UKOQD 8.10 +0.50 8.00 8.10 4,047 38,784 Trade
UKOEX 4.50 +0.20 4.40 4.50 8,773 23,406 Trade 22.50 UKOQX 9.70 +0.40 9.60 9.80 532 7,340 Trade


Author opinion better forget...

News was long time before ...All very expensiv

Perform butterfly in parts step for step on 17.50 with price "0" ?
But to day of expiration it would not 17.50

Better forget ...
 
Quote from ssss:

UKOEC 7.30 +0.20 7.30 7.50 18,050 69,747 Trade 15.00 UKOQC 5.00 +0.50 5.00 5.10 12,317 106,733 Trade
UKOEW 6.30 +0.05 6.30 6.40 6,224 60,940 Trade 17.50 UKOQW 6.50 +0.40 6.50 6.60 21,307 39,003 Trade
UKOED 5.30 +0.10 5.30 5.40 8,050 78,856 Trade 20.00 UKOQD 8.10 +0.50 8.00 8.10 4,047 38,784 Trade
UKOEX 4.50 +0.20 4.40 4.50 8,773 23,406 Trade 22.50 UKOQX 9.70 +0.40 9.60 9.80 532 7,340 Trade


Author opinion better forget...

News was long time before ...All very expensiv

Perform butterfly in parts step for step on 17.50 with price "0" ?
But to day of expiration it would not 17.50

Better forget ...
More...

Forget the position he will... Much sooner to act must one do.

Much to learn this Padawan does...

6gstvsj.jpg
 
Thinking about it, I have been.

Not sold on the concept, am I still.

Very happy with his March profits, for sure. :)
 
eg, A 5/7.5/20/22.5 IC


buy call 22.5
sell call 20 4.50-5.30 Risk 1.7 potencial profit 0.8

buy put 5 0.30
sell put 7.5 0.95 Risk 1.85 pot profit .65
----------------------------------

If going more as 22.5 you would losed .65-1.7=1.05
 
Actually after doing some more homework, I'm looking more at a bull put spread that's very OTM. With the IV on this position, it seems to be a safe bet.

MAY 7.5/12 puts give a decent profit with a nice landing zone and at an acceptable level of conservative risk.
 
I considered something like that ---

OTM bull put spread 7.5/12 (front month)
Buy ATM long calls front month

That way the calls are paid for by the profits from the spread...but given my relative inexperience with spreads, I dont want to get TOO complicated or keep track of too many things so soon, which is why I figured a deep OTM put spread would give a decent chance of landing in the green at expiration.
 
SEATTLE, May 9 /PRNewswire-FirstCall/ -- Dendreon Corporation (Nasdaq: DNDN - News) today announced that it received a Complete Response Letter, commonly referred to as an "approvable" letter, on May 8, 2007 from the U.S. Food and Drug Administration (FDA) regarding its Biologics License Application (BLA) for PROVENGE (sipuleucel-T) for the treatment of asymptomatic, metastatic, androgen-independent (also known as hormone refractory) prostate cancer.

The FDA has requested additional clinical data in support of the efficacy claim contained in the BLA. The Company is seeking a clarification from the FDA as to the nature of the data that is being requested.

"Given our strong belief in the survival benefit and safety profile of PROVENGE, coupled with the positive outcome of the Advisory Committee meeting, we are disappointed that this decision will cause a delay in the availability of PROVENGE for patients who suffer from advanced prostate cancer," said Mitchell H. Gold, M.D., president and chief executive officer of Dendreon.
 
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