ITMN option expensive

[Free Thinker]

Quote from highseas:

I've also collected some short OTM put premiums on ITMN. We shall see the results very soon. (I was in DNDN too--hopefully it will be a replay of that: approval).

hope you covered. never sell puts on a biotech approval play.

 

[IV_Trader]

Quote from Informed:

Suggest short May at money straddles to take advantage of the high premiums. I predict FDA will approve, but the share price won't move above 50.

Target price

Approval 50 (50%)
Approval with tough restriction or post approval study 45 (25%)
Request more data but no more new trial 38 or other delay (20%)
More data new trial 22 (5%)

I suggest to add "UN" to your handle

Thoughts?

 

[Options_Noob]

ITMN is down 75% in after hours trading. :eek:

The put sellers must be kicking themselves right now. I would never sell options on a biotech.

 

[Thermactor]

Quote from IV_Trader:

I suggest to add "UN" to your handle

Thoughts?

You made me spit out my drink

 

[patrick_h_wang]

Lesson learned.

 

[jprad]

Quote from spindr0:

on the internets.

There's more than one?

 

[highseas]

The news was disappointing. I sold some puts and I'll owe up the fact ($15, $12.5, and $10). Unfortunately, it was no DNDN replay for me.

Any suggestions as to what the next step is? Take the shares? (maybe not the $15, but perhaps $12.5 and $10 if assigned by May expiry).

Darn it. My pre-news worst case scenario was down $20 or even $25 dollars, but not $35!

 

[spindr0]

------------------------------------------------------------
Quote from spindr0:

on the internets.
------------------------------------------------------------

Quote from jprad:

There's more than one?

LOL. Yep. Dubya coined that Bushism in the 2000 campaign and it has been parodied on You Tube, Saturday Night Live, etc.

 

[spindr0]

Quote from highseas:

Any suggestions as to what the next step is? Take the shares? (maybe not the $15, but perhaps $12.5 and $10 if assigned by May expiry).

If you have reason to believe that it's not going lower, take a look at call premiums first thing this AM. If by some chance they haven't totally imploded (IV not totally in the crapper), you may have some salvage possibilities.

OTOH, if you don't have that stable/bounce conviction, take the loss, delete the symbol and repeat:

C'est la vie.
C'est la guerre.
C'est no more.

 

[highseas]

Interestingly, there was not a huge volatility crush. IV dropped, but not by nearly as much as I would have expected.

That could potentially bode well in the sense that people have hopes that it might go up. In fact, when I pull up the OTM IV graph I see a big "U" shape indicating that the IV for calls are quite high.

I took some losses by reducing my $15 puts, but am keeping the rest for now.