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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Rocky9 who wrote (13351)	10/6/2004 3:16:07 PM
From: Biomaven	Read Replies (1) \| Respond to of 52153

But as Eric has stated, CTIC has some downside protection here in that it has two other drugs, one approved and one (Pixantrone) in the pipeline. Stock looks cheap to me, and the buy-write you pointed out looks one reasonable way to play it. Peter

To: Rocky9 who wrote (13351)	10/6/2004 3:19:30 PM
From: Sam Citron	Respond to of 52153

Rocky, One thing I have noticed is that while there is much volatility ST, there is also a strong tendency to revert to the mean. This implies that selling volatility spikes can be quite profitable, provided there is a hedge, such as an underlying stock position to let go of in the case of a cc write or some intrinsic value such as a decent pipeline + cash in the case of a naked put write. Glad I might be of some help even if I only have one eye. <g> Sam

To: Rocky9 who wrote (13351)	10/6/2004 8:14:29 PM
From: Robohogs	Read Replies (1) \| Respond to of 52153

The issue with covered call strategies is that one takes all of the downside risk (less the call premium) for only a handful of the upside. It means you have capped your gains at some level and still have 80% or so downside potential. Think if one had done this around Soltara approval on SEPR. Stock got creamed and huge losses would have been made. A counter argument sometimes is that oh well, I can do it again when the option expires. But at what price? Locking in what loss? Jon