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Strategies & Market Trends : straddles and strangles

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To: charlie mcgeehan who wrote (2)	8/19/2004 1:24:28 PM
From: CapitalistHogg™	of 10

The IV/HV ratio of EYET is a screaming 3.06. This indicates to me that this company is in a binary event scenario. If you are correct about the NDA and their is no other very significant current events on the horizon then the approval of this drug would send the stock soaring literally overnight (Or straight down the tubes on disapproval). The way to play this situation is to determine the likelihood of approval and take a position before the event. Or wait until the event (approval/disapproval) and reversal of IV/HV ratio and sell calls/puts opposite to the news. In other words if the drug is approved and the stock price goes through the roof correlate this move with a reversal of the IV/HV ratio then sell slightly OTM front month calls naked. This method has worked very well for me. What exactly can we determine about pegaptanib sodium? Has it done well in phase III trials?

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