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Thinking about making a sizable options trade...

GasX

GasX

Lifer
Disclaimer: I am 35, have a graduate business degree and have made several options trades in the past. I am not doing this blindly...

Anywho, there is a company that develops compounds for cardiovascular diseases named CV Therapeutics (CVTX). It has been up. It has been down. It was beat down hard last year when it looked like the FDA was not going to approve its big drug. Things are looking promising again and I feel strongly that this company's stock is going to go back up significantly during the next year. I was just looking at the options prices and they look pretty good for the 2005 calls.

If anyone out there knows anything about options and/or this company and wants to take a look at the stock and let me know what they think, I am all ears...
 
Originally posted by: Kenazo
have they always had such a low earnings/share?
Click to expand...
Yes, they are developing new therapies. Until one of them gets approved by the FDA and goes to market, they will not be making any money.
 
Originally posted by: Pliablemoose
I've done some options trading & got burned.

If you have a good feeling about the stock, take a chance.
Click to expand...
I may well do it. I have to figure out what the stock is likely to spike at and when that might happen. Then I have to make a risk/leverage decision. My goal would be to take $5000-$6000 and turn it into $20,000-$30,000 if the stock hits $25 or so within a year.

 
why not just take a margined long position? it just seems a bit too risk-seeking to get into a long call option just for the sake of levering up. you may also want to take into consideration volume and current supply/demand...the option may or may not be properly priced if it's too thinly traded. I mean, sure you can turn that $5-$6K into $20-30K if the stock goes up like that, but it could also turn into $0K just as quickly if the stock tanks.
 
Originally posted by: Mwilding
Disclaimer: I am 35, have a graduate business degree and have made several options trades in the past. I am not doing this blindly...

Anywho, there is a company that develops compounds for cardiovascular diseases named CV Therapeutics (CVTX). It has been up. It has been down. It was beat down hard last year when it looked like the FDA was not going to approve its big drug. Things are looking promising again and I feel strongly that this company's stock is going to go back up significantly during the next year. I was just looking at the options prices and they look pretty good for the 2005 calls.

If anyone out there knows anything about options and/or this company and wants to take a look at the stock and let me know what they think, I am all ears...
Click to expand...

What do you mean the "2005 calls" what strike???
 
Originally posted by: DuffmanOhYeah
Originally posted by: Mwilding
Disclaimer: I am 35, have a graduate business degree and have made several options trades in the past. I am not doing this blindly...

Anywho, there is a company that develops compounds for cardiovascular diseases named CV Therapeutics (CVTX). It has been up. It has been down. It was beat down hard last year when it looked like the FDA was not going to approve its big drug. Things are looking promising again and I feel strongly that this company's stock is going to go back up significantly during the next year. I was just looking at the options prices and they look pretty good for the 2005 calls.

If anyone out there knows anything about options and/or this company and wants to take a look at the stock and let me know what they think, I am all ears...
Click to expand...

What do you mean the "2005 calls" what strike???
Click to expand...
$15 - $25 - like I said, I have to do a risk/ leverage calculation to pick the right strike price for me. If I was REALLY bullish, I'd stock up on the 2006 $40 calls - they're at about $0.20 (NOT going to happen!)

 
Just doing a quick look, this company seems generally poor. They seem to have negative leverage in their model. Granted, this is what Im seeing in 2 minutes of probing, but that strikes me right off the bat.

that said, you are still trading at near 4 year lows.

As far as the options go, eh, Im not super excited. Nothing terribly sexy.

The jan 05 17.5 strikes are probably the best of the lot, but even then you are banking on almost 28% price appreciation before you are in the money.
 
in my opinion you are compunding your risk by getting options for so far out, with the way the stock looks now, i wouldnt invest in it.
 
Originally posted by: Mwilding
Originally posted by: Pliablemoose
I've done some options trading & got burned.

If you have a good feeling about the stock, take a chance.
Click to expand...
I may well do it. I have to figure out what the stock is likely to spike at and when that might happen. Then I have to make a risk/leverage decision. My goal would be to take $5000-$6000 and turn it into $20,000-$30,000 if the stock hits $25 or so within a year.
Click to expand...



from $5k to $30k? thats IT, thats kinda low reward for the high risk. remember, most people lost everything in options.
 
Originally posted by: richardycc
Originally posted by: Mwilding
Originally posted by: Pliablemoose
I've done some options trading & got burned.

If you have a good feeling about the stock, take a chance.
Click to expand...
I may well do it. I have to figure out what the stock is likely to spike at and when that might happen. Then I have to make a risk/leverage decision. My goal would be to take $5000-$6000 and turn it into $20,000-$30,000 if the stock hits $25 or so within a year.
Click to expand...



from $5k to $30k? thats IT, thats kinda low reward for the high risk. remember, most people lost everything in options.
Click to expand...

Are you kidding or just dumb? If you had 5k and assumed a 12% return annualy, it would take 16 years to get to 30k! People lost money because they were dumb and or overly optimistic. Yes, options trading does present a whole new risk spectrum, but the leverage that can be applied is enormous. ie. 5k to 30k. Anthough for this particular equity, I dont think it is gonna happen.
 
Originally posted by: DuffmanOhYeah
Just doing a quick look, this company seems generally poor. They seem to have negative leverage in their model. Granted, this is what Im seeing in 2 minutes of probing, but that strikes me right off the bat.

that said, you are still trading at near 4 year lows.

As far as the options go, eh, Im not super excited. Nothing terribly sexy.

The jan 05 17.5 strikes are probably the best of the lot, but even then you are banking on almost 28% price appreciation before you are in the money.
Click to expand...
I don't think 28% is out of the question, but I have some more research to do before I pull the trigger!
 
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