VRX

O

oldnemesis

http://stockcharts.com/h-sc/ui?s=vrx

http://www.marketwatch.com/story/va...roup-gives-thumbs-up-2015-11-19?siteid=yhoof2

http://www.bloomberg.com/news/artic...t-says-reaction-overdone-?cmpid=yhoo.headline

Citigroup seems to have called a bottom on VRX.

The VRX story is long, complex and dirty. I only know the outlines myself, but it seems to be an opportunity for buying when 'blood is in the streets'

Of course option people would never actually buy the stock but a bull call spread doesn't take on too much risk.

Trade:
With VRX at $84.00
March 85/100 bull call spread for a net debit of $573

Price................. Profit / Loss............. ROI %
70.00.................... (573.00)............... -100.00%
80.00.................... (573.00)............... -100.00%
85.00.................... (573.00)............... -100.00%
87.42.................... (330.60)............... -57.70%
90.73......................... 0.00................... 0.00%
99.95...................... 921.90............... 160.89%
100.00.................... 927.00............... 161.78%
110.00.................... 927.00............... 161.78%
120.00.................... 927.00............... 161.78%

WARNING: Risk capital only.
 
Would you share how you pick the month, based on some volatility analysis or you have some sort of fundamental view on the company itself ?
 
How I pick the month varies. Shorter is always better, but you need enough yield to make the trade worth commissions etc. Also volatility of underlying plays a role, plus how long the current news about the company and the market make likely the current distributions will last.

Also... while I don't always list it, the estimated expectation plays a big role. I will often try several different months and see how expectation computes out.
 
Just heard that VRX has been given a consensus rating of “Buy” by the 32 ratings firms that are currently covering the firm, AnalystRatings reports.
 
http://finance.yahoo.com/news/valeant-hires-attorney-crisis-management-183017923.html

http://stockcharts.com/h-sc/ui?s=vrx

images
 
Last edited:
oldnemesis said:
So now that spread we put on is in the money.
More...


Much better than those $50.00 credit spread ideas that you post. But with VRX at $110.00 what lesson did you learn?

It's something I always mention about the pitfalls of Debit Spreads and how long calls or puts are vastly superior to debit spreads.



:)
 
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