>>I will remind everyone that any of the bear option strategies that requires you to sell calls face the issue of having the calls assigned early. <<
That is why, in the case of bear spreads, for example, one uses puts instead of calls. At least, I do. Yes, it's a debit to open the transaction, but assignment risk is basically nil, and the profit potential is the same.
Jon, you posted elsewhere that the dates of implied events in Idos' link regarding short squeezes looked wrong. Option players in biotech have to learn to to be cautious and go out farther than one expects the actual event, even if it costs a bit more money. Play a PDUFA date with a strike in that month at your risk; the FDA can always decide to extend. Companies announce that their trial enrollment was slower than expected, their statistician got sick, etc. Delays happen, and can really burn folks long options. And then there's simple bloody-mindedness, as Kenhott suggests re NRMX. I'm not sure about that one. I think the stock would drop a bit, anyhow, though not as much as on actual announcement of failure, granted. BTW, I have opened August put bear spreads on NRMX, and may add to them if NRMX gets strong for some reason.
The AGIX event was AZN dropping the partnership, which happened two days after that blog was written. Kenhott called that one correctly, though it wasn't the hardest call to make.
Cheers, Tuck |
