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I am somewhat surprised by the commitment of the call spread buyer to hold on till this week as I expected a rapid decay in prob of anything happening by expiration. Yet here we are. Only 300 max or so of the 12 call contracts were closed by my guesstimate and 5000 is left. This will be an overhang on the stock whenever it goes significantly above 12. CEO has stated his guess of Dec/Jan as likely date of FDA action and I am curious how he arrived at that because the option market is unwilling to price in any event through June.
The discounted value of dropped project is small in relation to HCV so I am not sure what the big deal is. This morning, I joined you as a shareholder. Options here are not tradable, probably not until clearance is announced.
Average decision time is 81 days from day of oral argument, 10/15. And like you described, timing depends on complexity. I don't have an opinion on where this case resides on the complexity scale. My wild guess is that they punt it back.
IMO it's decision time for the holder of the bullish call spread given the stock price movement. Exit with profit soon or hold till expiration and hope for a close above $13 by then. But then the incremental profit in the best case scenario compared to taking profits now is 0.50 or so. If he is long the underlying, then he can leg out of the call side against the upside risk of positive news in 9 days. However, option prices suggest no news coming any time soon. I think the high prob case is that profit is taken on options before expiration.
It's impossible to make apriori predictions on timing and delays so I agree that GS and DB should avoid timing predictions. However, there has been a long history of people trying to make timing guesses here if I look at the old posts. How many accurately anticipated the success of TEVA in dragging out the generic GA review process? Option pricing suggest no incremental differences in process ending over the next six months. The odds are high that much of the Dec OTM calls will expire worthless and those odds will drop rapidly over the next 10 days.
MNTA IV has dropped back into the pack since my post.
The reason for the distribution of open interest between Jan and Dec is that Jan's didn't come into existence until about 9 trading days ago so for liquidity purposes, players will always prefer the ones with the biggest open interest. Unless there is some correlated move in TEVA, the move is not event based IMO. Although, the options IV suggest a big move (+/- ~1.5) is possible by weeks end as IV went up another 10% compared to Monday. So options player are starting to price in a binary event before expiration.
However, I see no such pricing signals in either TEVA or TEVA options.
Most probably a call spread. I think the higher probability is that it was initiated on the buy side where someone is buying the 12 calls and selling the 13 calls for a net cost of 0.27 per contract.
The alternative view would be that someone took advantage of the positive move yesterday to do a bearish spread, but I don't think so as the risks doesn't favor that. The max profit would be 0.73 if a positive announcement happens before Dec expiration. Even if, nothing happens by Dec expiration, the spread will probably have some value and the party can exit out of the position with less than max loss of 0.27.
I don't have the data from yesterday and I wasn't paying attention. Can you recap?
As I recall, there was active volume on the Monday following Nov expiration and that was about it. Implied volatility is about 10% higher when comparing Dec to Jan and about half a standard deviation above trailing 12 month average.
Nice to see that the FDA agrees with regards to your answer to my question.
Depends on what you are looking at. If you are looking at stock only, then not much seems to be anticipated. But look at the options, they are very active and the open interest represents 1+ million shares on the long side and another 100k+already added today. If this continues, then we will approach 20000+ call contracts soon, some of which would be hedging against short positions. Bottom line is that option players expect volatility spike before expiration, although option prices hasn't moved..
Just starting to kick the tires on this one. Noticed that S. Korean marketing clearance was granted in summer of 2012 and nothing has sold there. I wonder if the same thing will happen in China in that the wealthy patients that can afford surgeries will just fly to Taiwan, Hong Kong, US, Australia to get procedures.
LMWH/m402 question.
The literature is not optimistic with regard to combination therapy with LMWH. See link below. What do people here think with regards to m402? Momenta scientists have changed the LMWH characteristics towards lowering anticoagulation activity but it is not clear what other characteristics if any are being optimized.
http://www.medicalnewstoday.com/articles/241707.php
A lot of energy was spent today and the game will have vanishing returns if this is the best downdraft that can be manufactured with twice the normal volume. I hope you are right and that they try again and again. I sold half of their shares back to them at 10.82, kept the short puts. Will gladly play along again and reduce my cost basis. As for 11.1 - nothing magical about that or any other number prior to FDA response.
Yes and here is the rebound to back above the moving average. I use the 200 period volume weighted 15 min numbers currently ~10.82 usually goes +/- 0.20 around MA. So predictable.
LOL. There is a doctor evil lurking behind the curtain? The Dec call options are active up to the 20 strike. Probably financed by sale of the Dec 10 puts. A synthetic long of 40K shares or so at a credit of 40 cents per share just eyeballing it. Not a bad way to play the FDA response to CP.
Also sold a few Nov. 10 puts for 0.40. My avg price for the shares today would be just under 10 if the stock gets and stays below 10 by Nov expiration (9 days). Current prob for that happening is 46%.
As long as there are stops to take out, the game is on. So I joined the game and picked up a few shares in the 10.3s
I don't believe any HFT outfit would touch MNTA - not enough volume and liquidity. Looking at the ask side of the Nov 10 puts - it started at 0.40 this morning and as the stock gets sold, the ask shrinks to 0.30 and stuck there. The stock has dropped 0.30 and the put premium should have moved up about 0.10. Time decay is taking hold while volatility risk goes up. Tells me the option sellers don't have much faith in this drop. Same applies when the stock goes up and ask side on calls don't budge. For the last 2 days, someone is also selling the Nov. 11 strangles on a small scale, betting that the stock stays in the range of 9.90 to 12.10 by Nov. expiration. So my guess is that this mean reverts to whatever moving average the large 300K share player is playing.
PS. as I was typing this, the ask on the Nov 10 finally moves to 0.35 but it took a dip to 10.50 to get that.
Mid price was $.275 and it hasn't moved. Bid 0.15 and ask 0.40. Somebody sold at 0.25. Probability is 2/3 that it will expire worthless in 11 days. The 3000 10-12 strangle that was sold a few weeks ago has half the premium of when the strangle was sold. IMO This is part of the same game - harvesting premium from a stagnant stock.
I think the system is great too but only for niche procedures like complex VT. That's not enough of a market to make the company. More than one specialist have told me that the magnetic force is not high enough for the bread and butter procedures. If they listen to those specialists and come up with higher force catheters, then they may have a "great" system. Right now they don't and the lack of market penetration shows it. I think JNJ makes the magnetic catheters so they are not even in the driver's seat.
sorry typo. 2015.
5% shift per quarter would get 40 mg formulation to 2/3 of the scripts by the time all the dust settles in early 2015. The pie is shrinking for all the generic Copaxone competitors.
$45K is even better. They aren't doing this naked. Like I said they aren't stupid. It also means they are long at least 300,000 shares. The probability that the hedge will expire worthless is right around 70% at Nov. expiration and they will pocket all of the 0.85 per share hedge.
That just proves that you are a babe in the woods when it comes to options. The strangle is now worth 0.70 now. The entity has already gained 0.15 or $4500 on the hedge in two days. It is a non directional hedge and he gets to trigger volatility be entering large sell or buy orders. Be my guest if you want to buy puts or calls. You can have all you want.
I am assuming they are smart and not dumb and would go with the higher probability-for-profit trade. The market makers will take what you describe all day, every day.
That's a strangle. The entity is hedging 300000 shrs and collected 0.85. It is a bet the the stock remains range bound between 10 and 12. It is a sensible bet if you don't expect SC nor the FDA to come up with anything by Nov expiration. Breakeven pt is 9.15 on the low side and 12.85 on the high side. This stock is regularly manipulated because it is so thinly traded and stops are easy to break. Someone is accumulating a lot of stock in the 10's. Probably the same entity that's doing the strangle.
Short it. I think you will be much happier. I would have been. Glad I don't have too much but I am reluctant to add as bottom going back 10 years is around $5 and there isn't much technical support below here.
Generic GA is getting crowded.
I doubt that anyone knows the timing and trade on guesses of such. The stock seems to be trading in a mean reverting cycle if you look at implied volatility. It looks to be cycling back up now and can last ~2 weeks then head back down. This will go on until the FDA interrupts with real news.
"Trust me" ?
Where are the sales to support $10 stock price?
Where are the sales to support $10 stock price?
We all have our biases. The august 12 teva response to Sandoz/mnta cp comments are quite entertaining. 20 yrs of selling GA and they still don't know how it works. And then the part where they don't want the FDA to refer to mnta's version as a GA unless proven otherwise .... LOL I voted with my $ and added on this last sell off.
I really don't understand why they haven't been able to sell more systems when doctors know that the clearance will arrive. Why would it be any different now that it is has the rubber stamp. You have said in your prior posts that it does make a difference. Can you take me through that in more detail? thnx
That chart doesn't tell me much. Copaxone is number 10. If you look at the top 9, they all show similar trends and comparisons, except for Humira. Could this be an effect of the ACA causing hospitals and pharms to better manage prescriptions and inventory?
My earlier question to you was answered in the slides provided by DD. Nrx is 52% so I think 40 mg uptake will remain close to current split.
jbog - did they update the new prescription number on split between 20 and 40 mg. Last time, it was 50% if recollection serves.
Fair enough. I was just trying to get you to take a stand about your guess of 1 week or some time in August in contrast to option pricing which seems to say 50/50 by dec expiration. If you think sooner, then calls look cheap. I bought some when the stock went down on TEVA legal challenges and adding on dips. I have no idea on the timing for either MNTA or MYL clearances.
What probability do you assign to your timing guess? The option market says there is only 4% chance that the stock will exceed 15 by Aug expiration. If you believe it is done sooner, you can pick up the 15 calls for a nickel.
From the Teva sponsored gene expression paper -
"However, relatively few genes were repeatedly found to be differentially expressed in the course of time. This indicated that the gene regulatory effects of GA on monocytes are rather modest and no stable gene expression signature could be seen. Nevertheless, the mRNA changes of some genes might tell us something about GA’s molecular mechanisms of action."
I am not an expert in this area. However, it is clear from the paper that their data was not repeatable over time. Teva researchers themselves don't understand the mechanism nor the relevance of GE data. Is the FDA too chicken to call "rabbit hole"?
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3852967/