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Biotech / Medical : Biotech Derivatives

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To: RWReeves who wrote (473)	7/7/2000 9:22:03 PM
From: RWReeves	Read Replies (1) of 555

Using long in the money Feb calls on PSSI as a second derivative of FSH (FSH munched PSSI: FSH has no options, PSSI does). Options sell at little time premium. Kind of an arbitrage experiment. If it works here, could be fun in other munch situations. Rabid Finance MBA types can probably synthesize as a leveraged buy of FSH. Might play with this and figure out the equivalent positions. At the least apply B/S to FSH and see what the implied PSSI options prices are. Efficent market? Probably not, I think it will miss the implied volatility of FSH and will need to factor in the possibility of a deal failure. RWR

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