Sepracor-Looks very promising Message Board

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Biotech / Medical : Sepracor-Looks very promising

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To: Bob Swift who wrote (844)	5/6/1998 9:19:00 AM
From: Biomaven	of 10280

Talking about options, the OCT 50 CALL is 4.625 and the OCT 35 CALL is 14.625. Now if I write a covered contract of OCT 50 CALL and buy a contract of OCT 35 CALL, I will for sure make $5/share while still keeping the same number of shares. Sort of eating my cake and keeping it. Am I missing something ? There is usually no free cake to be had. :( In your example, you would lose on any significant decline in price. For example, if in October the stock closed at $35 or below, you would be out $10 on your options (the difference between what you paid for your OCT 35 calls and what you received for your OCT 50 contracts). This is true whether or not you actually own the underlying shares. On the comparison with ENMD: ENMD was a freak event (for which I was duly grateful) caused by huge media publicity. What ENMD stock did is totally unrelated to SEPR and its valuation, other than if it draws renewed speculative attention to biotechs (which may or may not be good, but which will certainly make things more interesting). Peter

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