Lower end of your 3.25 to 5 range is possible so you might want to watch the timing to get out of your positions. Good luck.
Something from the WSJ:
Dendreon Is Active Before FDA Move
By MOHAMMED HADI
March 28, 2007; Page C2 WSJ
It is nail-biting time for shareholders of Dendreon Corp.
The drug developer's chief candidate for a revenue-generating product, a prostate-cancer treatment called Provenge, will be reviewed by a Food and Drug Administration advisory panel tomorrow, and, if the options market is any indicator, this meeting could prompt some large moves in the Seattle company's stock.
Yesterday, about 184,000 puts and calls on Dendreon changed hands, more than six times the average daily volume of Dendreon options traded in recent weeks, according to data from TradeAlert.com.
Though traders deployed several perspectives on exactly what Dendreon shares will do, they were consistent about one thing: that the stock is going to make a big move, noted Peter Dunay, chief market strategist at Leeb Capital Management.
One simple way to illustrate this is through the price of what option traders call a straddle: a position made up of one call option and one put option, both with the same strike price. Traders who buy straddles are getting in position for a move in Dendreon shares but are unwilling to choose a direction for that move.
In this case, with shares of Dendreon up 8 cents to $4.62, Dunay noted that the April 5 straddle cost about $2.90 -- implying that traders think the stock could rise or fall by more than 62% in the coming days.
Certainly contributing to the potential for a move higher is the fact that a high level of Dendreon shares have been sold short. Short sellers hold a view that the news won't be good -- but it also means that good news could cause an abnormally large jump in Dendreon's stock price as traders covering existing short positions rush to buy stock.
Rather than a recommendation for approval, some analysts expect the drug to be deemed "approvable" -- pending more data. That could delay by years Dendreon's timeline for getting Provenge to the market, they say.
Still, Provenge has been given priority review status by the FDA, which means that if all goes well, it could be approved as soon as May. If t hat happens, the drug will be a unique treatment for cancer because it is designed to stimulate a person's immune system to fight cancer. |
