No problem -- the broker doesn't really close it out; the trades actually offset each other, i.e. you "buy" the shares at 8 and then "sell" them at 9 (since you sold the right to buy the shares at 9)...
This trade is basically a combination of a (12 contract, 8/9 strike) Call spread and a (22 spread, 8/10/12 strike) Butterfly. First, if price is around $10 by expiration, I would leave the 12 contract 8/9 strike Call spread alone (it will automatically close out by the broker). Next i would likely close out the front end of the butterfly, that is, sell the remaining 22 8 strike Calls and buy back the 44 10 strike Calls AT THE SAME TIME (avoid legging out with naked Calls -- far too risky, you never know what is going to happen). Because you note that the price is $10, this creates a risk that the sold Calls will expire in the money -- i prefer to get rid of this risk; also, at that point in the trade, the options will most likely be trading near intrinsic so the slippage shouldn't be that great. Finally, i would simply let the 12 strike Calls expire worthless (close to where they would be trading -- why waste the commission?). Hope that helps. If not, send me a message on twitter: biotechtraderHB
Trading Human Genome Sciences' Pending FDA Decision [View article]
the new (version) of the book is now available on amazon. i am going to put a quick note out on my blog describing the difference between the two versions...biotechtrad... shortly. rgds.
Trading Human Genome Sciences' Pending FDA Decision [View article]
I'm having a good year so far so i decided to allocate extra risk to this trade -- i covered part of the sold 30 strike calls. i'm going to hold through to expiration (which my be the wrong decision!). book should be available this week assuming all goes smoothly - it will be release under the 2nd edition. good luck with your trading.
Trading Human Genome Sciences' Pending FDA Decision [View article]
they are fairly good at execution -- but i can't imagine other brokers being so much better as to justify such high commissions (don't forget you also have to "pay" the spread)...everything with these guys is real time and they are able to do complex trades...
Trading Human Genome Sciences' Pending FDA Decision [View article]
thanks for the referral but i already use optionshouse! so far the cheapest option broker i have found -- if anyone out there knows of anyone cheaper please let me know...
Trading Human Genome Sciences' Pending FDA Decision [View article]
You are right -- a big concern is a muted response (i thought about this and it remains an issue for me). this time, however, i am going to take an outright directional risk and trust the move currently implied by the options (analyst estimates seem a bit aggressive) -- i could be wrong but my risk is defined and i am ok with the amount i could lose...good luck with your own strategy.
Trading Human Genome Sciences' Pending FDA Decision [View article]
That's another good strategy -- i actually had that set up (closed out the Put side) -- i decided (right or wrong) to go only bullish...good luck with your trade...
Clinical Data and Forest Labs Agree to Split the Risk [View article]
Michael - my thoughts exactly. options are trading at intrinsic value (plus the floor has been set at $30)...and if a suitor comes, it will be sooner rather than later...
Conservative, Bullish Trading Strategy on Protalix Biotherapeutics' PDUFA Date [View article]
options are (currently) pricing a $3.00 move (appox) -- i'm not sure a straddle makes sense (especially given the 2.50 increment strikes) but i could be wrong -- too bad there aren't 1.00 strike increments: there would be 10x more ways to trade this...
Conservative, Bullish Trading Strategy on Protalix Biotherapeutics' PDUFA Date [View article]
Actually my initial trade was to do the 5/7.5/10 Put butterfly (when the stock was over $10) but i missed it (i.e. couldn't get filled at a good price -- i tend to like to trade both sides of these situations if the price is right). There will probably be many different ways to trade this next week as we approach the PDUFA date...
Conservative, Bullish Trading Strategy on Protalix Biotherapeutics' PDUFA Date [View article]
It depends on what value i can get -- if around $2,000, i would close it out...if positive, however, it may be worth seeing where the shares trade by/near expiration which would be only a few weeks away (as my max "loss" at that point would only be $87). Regarding the new book edition, it is mainly a revision with lots of new content on top of the existing content...worth a look! good luck with your trading...
Trading XenoPort's PDUFA Event [View article]
Trading XenoPort's PDUFA Event [View article]
Trading Human Genome Sciences' Pending FDA Decision [View article]
Trading Human Genome Sciences' Pending FDA Decision [View article]
Trading Human Genome Sciences' Pending FDA Decision [View article]
Trading Human Genome Sciences' Pending FDA Decision [View article]
Trading Human Genome Sciences' Pending FDA Decision [View article]
Trading Human Genome Sciences' Pending FDA Decision [View article]
Trading Human Genome Sciences' Pending FDA Decision [View article]
Conservative, Bullish Trading Strategy on Protalix Biotherapeutics' PDUFA Date [View article]
Clinical Data and Forest Labs Agree to Split the Risk [View article]
Conservative, Bullish Trading Strategy on Protalix Biotherapeutics' PDUFA Date [View article]
Going "off" line now -- good luck.
Conservative, Bullish Trading Strategy on Protalix Biotherapeutics' PDUFA Date [View article]
Conservative, Bullish Trading Strategy on Protalix Biotherapeutics' PDUFA Date [View article]
Conservative, Bullish Trading Strategy on Protalix Biotherapeutics' PDUFA Date [View article]