$ARNA implied volatility just went from 600-800 pre-approval to around 150. Crazy.

NOW is the time to play options on this. I say get some puts and see if this can break that 11.30 level.

I like it. They have gotten sold way down since decision.

Ha, or just a lucky SOB. Glad you made some money trading these though, from what I recall you made out pretty well!

Sorry bud, can't win 'em all though. You might see some covering at EOD, I would just wait it out and try to sell around .85 again if possible.

Bingo, Mikey knows what's up. Wish I would have sold these, sigh.

You would have your jaw dropped if I had posted my prediction earlier. I had "This will open at $13.50 and bleed down to $12" written into the box but cancelled my post. Now THAT would have shocked you. :)

Read up on Implied volatility and vega. The move was priced into the options because there was expectation of the stock moving.

This goes for both puts and calls.

The options were priced with extremely high premiums. 55% move was priced in. So both call and put buyers have lost money on this. Of course, put buyers' options are pretty much worthless now.

Selling the news in Biotech

An excellent article very relevant to $ARNA:

http://seekingalpha.com/article/431161-should-you-sell-the-news-in-biotech-stocks

For anyone interested in trading these, bios are all about the "run-up" for options.

Yessir, as expected.

$ARNA Jun 12 calls were trading at .95 before the halt...now @ .88

$ARNA opens @ 13.50, immediately down below $12..

Will probably hover around $13-$13.50 for a while then bleed back down..

Yeah, people on stocktwits going crazy about "$50 bid on LII!!!"

but they don't quite understand that it will be taken down before trading resumes..

Hope so! I've got 129 puts that are dead in the water. A big push down so I can unload them around .15 would be fantastic.

$SPY losing it a little here.

Haha nah it was never gonna dip to $5, but I've seen some get raided down like 15-20% in a day. Wouldn't have been surprised to see $7.50 or so temporarily today.

You did. You made profit and avoided having to go into PDUFA. That is the goal in bios imo. You sell BEFORE the decision unless you're expecting a shock decision or there is a ton of short interest ($ARNA is not one of these). Even if you could have made a few extra bucks by holding, your anxiety would have been higher.

Read this:

http://seekingalpha.com/article/431161-should-you-sell-the-news-in-biotech-stocks

$ARNA resuming at 1:45, so 20 mins from now.

Exactly, but gambling for the sake of gambling probably isn't the way to go, especially with premiums so high-priced. I just don't understand the appeal of even attempting to play options here. If this gets sold off after trading resumes even if you were right you could be wrong. Same thing with earnings. Earnings should be traded if you notice something yourself, a spike in volume, some sort of past occurrence, something, anything. I don't see that in $ARNA with the way people are trading it. I think there will be a lot of new retail people who bought in around $11 who are going to be sorely disappointed when this thing doesn't pop to $17-$18 like some are expecting.

No, it is not the same thing imo. If you feel that way about your own trading style then so be it, but most traders here are not even remotely as clueless about their investments as some of the $ARNA retail investors are. Trust me, I've seen a LOT of biotech investing, and this one takes the cake. Its like the $FB of biotech investing. People throwing money at it because it is moving fast and hard and has lots of media exposure.

Also, I'm not talking about people on this board, but people on stocktwits.

Just my 2 cents but there is something comical about some of the comments I'm reading.

Because they have very little grasp on the medical field, efficacy, the biotech sector, $ARNA as a company, and future sales projections.

Those who play earnings blindly are the same way.

Reading the $ARNA stocktwits it worries me to see how many inexperienced investors were simply gambling on $ARNA. I mean, I'm all for retail guys getting back in the market but there are people asking the most basic questions and obviously did NO DD on $ARNA or Lorc.

Incredible.

Bios are always halted pending approval and AdCom meetings. It will likely resume trading within the hour, or it could be A/H. Either way it will be today.

They all have higher premiums. The Implied Volatility affects both puts and calls, not necessarily equally but they will both be affected on any stock.

The Imp. Vol on $ARNA options right now is outrageous, something like 550-600 up to 850 in the higher strike calls. No joke, a 50%+ move is cooked in. Just to put it in perspective, just on the WEEKLIES, which expire in 2 days, the 12 calls last traded at .95

It isn't priced into the share price, its priced into the options.

$MCP has lots of room to run. RSI at 45 right now. Could run to $23 easy in the next couple days.

$X calls from .07 x .08 to .13 x .14 now. I got out too early, oh well.

$ORLY guidance brought $AZO down. Plus insider selling by Senior VP reported yesterday.

$UNH and other healthcare stocks still climbing.

Out $X 20 w calls @ .12 from .07 yesterday.

Small position but that with my $ZNGA trade yesterday got me to break even assuming the $SPY trade doesn't come back to life. Unfortunate but it is what it is.

I'll be riding the $SPY 129 w puts out unless they get back to .15 or so. Then I'll be cutting them for a 50% loss.

Haha yepp, just trying to keep track of everything on my watch list (I have about 35 different stocks being watched actively right now and tons of strike prices, crazy!)

Yessir, sorry haven't been posting a lot, doing a lot of trading. My $SPY position killed me here, but $X is doing quite well. Will probably get rid of it at .12

tomorrow will be a wild day indeed.

Also, UNH surging :D

It is perception of the ruling more than anything and I think it is more metagame oriented than that. A defeat of Obamacare (in the eyes of conservatives), is a blow to Obama, and the markets support Romney. I am independent so I don't care one way or the other, but the market will react to the ruling if the laws get struck down.

Healthcare calls are going to go big here people.

Oh haha, yeah that'll get ya ;)

The weeklies are hardly different but, 5% difference on many of them.

I would stay away, personally.

Because they are, and have been for over a week now. The Imp Vol. is sky high, 55% move priced in right now. If they weren't, MMs would lose money to an easy straddle. You would just play the $12 or $13 calls and $4 or $5 puts and make guaranteed money. The MMs aren't stupid, that's for sure.

This is my feeling as well. Sell the news, the law of biotech. The short interest is considerably lower now (20 million or so) than it has been in the past. Not sure much covering will happen and 72% of shares are retail holders who want a quick flip.