Antares Pharma, Inc. (ATRS)

[ou71764]

Deep in-the-money calls are sort of like betting on the favorite in a horse race to "show". Most of the time a bet like that will pay off - not a huge gain, but the odds are with you.

So if all goes well with our PDUFA date, as it should, then these calls will have a bigger percentage gain than owning the shares.

But you have correctly characterized the risk - if we fall back to 2.50 or lower, then you lose 100% of your money. And 2.50 is as good of an estimate as any as to what would happen.

I'm pretty bullish. But I am retired and I really can't sustain a big loss in my portfolio. I like ATRS a lot. But if we get another slap from the FDA in 2 weeks, we definitely will have a selloff. I won't like it if that occurs (duh!) but if I choose, I can ride out the selloff by sitting on my shares. Whereas options would be close to expiring worthless.

Options pay off bigger when things work well, but the loss is larger when things go south: "you pays your money and you takes your choice."