A.I.M. Users Bulletin Board

[SFSecurity]

Hi folks, Remember me asking about NKTR and its 40+% drop a couple of weeks ago? Well I looked at it and the relatively short term Bolsa Index and felt it was likely to go back up over the next few months so I sold some PUTs at $55, figuring it was likely to expire today just under that price so I would get in at a reasonable price, ~$52.75/share, a price slightly below the EOD low point since the big drop of $53.04.

My idea was to then buy about 30-35% more than the options would provide so I could AIM the total position, like I should have done with IJR. I'd use the combo of selling a CALL at $55, $55.50 or $56 and also use the AIM signals to buy and sell along the way. If the CALLs expired worthless, it'd just be more money in the pocket for selling the option. If the shares were called away then I'd make about $2.25 to $3.25 per share plus the amount I'd get for selling the option, depending on which option price I selected, another ~$1.00-$1.50/share. And I'd have some leftover shares to continue on the AIM path.

I think I had the right idea; to take advantage of the spooked shareholders, the volatility with a BETA of 2.77, a 52 week range of $17.51 - $111.36, and buying from the scared so I could sell to the greedy, but, alas, unless it crashes before the end of the day, I won't get the stock, only the gain from selling the PUT.

However, the idea of finding high BETA positions that have taken a plunge and combining selling options and AIM seems like a worthy approach in markets that are vacillating like they have been for the last while.

Too bad Indivior, PLC. (INVVY), doesn't have options available. The ~28% drop today would make it worth looking at in more depth.

Oh well, can't win 'm all.

Have a great weekend gang.