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Biotech / Medical : Biotech Derivatives

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To: Bob L who wrote (425)	9/30/1999 11:17:00 PM
From: LLCF	Read Replies (2) of 555

<April would be like a 100% return annualized, right? > Lets say that CLTR gets the filing done such that FDA has to approve or deny by Apr. 1.... Come march 29th... one could argue that the straddle is still worth the same amount... perhaps more. The stock could easily open @ $ value [$6] or $35 or so after the announcement. If he's long 100k [@12] shares and short 1000 straddles @ $8 and the stock opens @ $6.... the straddle is trading 6 1/2 for a whopping profit of $150k and he's lost 600k on his stock. Plus he's still sitting on 200k shrs [he'll get assigned on his puts]. If Bexxar gets approved, he essentially makes his $8 1000x, or 800k and thats it. If this thing drags past April expiration... he probably has hit a home run. DAK

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