Amarin Corp Plc (AMRN)

[jessellivermore]

It is still early in the morning here in Orlando..and I am scheduled for a "procedure"...this AM at 8:30...I have a minor blockage of an artery coming off the Right Popliteal Artery which supplys the gastroc and the anterior tibial muscle...They will perform a a catheter angioplasty via the right femoral artery..It is an outpatient procedure and I will be back home in the afternoon...

It has effected my thinking..Reading Georges comments made a lot of sense..regarding hedging..but hedging when the Amarin PPS is in the 7$-$8 dollar range is not the same as hedging the stock when it was in the high teens as it was in the Du trial..This goes to the issue of whether or not we are looking at a an asymmetrical bet..The Du DC issue was exactly the kind of binary event that hedging was indicated..Nobody in their right mind thought Du would pull off the stunt she did...So if she ruled for Amarin most likely there would have been not much of a price increase as a positive decision was "baked in" to the PPS...On the other hand a bet she would strike down Amarin was essentially disregarded..AND if you bet she would (hedge) as momma did..Then you were going to get paid off..(ie an asymmetrical bet)...At seven dollars..and the Du decision in the rear view mirror there is no one in his right mind that is not afraid the AC might sanctify the Du decision...So by similar reasoning a loss in AC is likely baked in to the PPS and you might not get paid off for you puts..

The asymmetrical bet in this situation. Is not to hedge..because if the AC decides for Amarin then the PPS is going right back up to the high teens..
These are the times that try men's souls...Here is more food for thought about this latest binary event..Binary events always increase volatility and volatility is a very significant factor in determining how much these puts are going to cost you.and how much you are going to be able to sell them for...One of the most important axioms in options.is you should sell volatility..Once the binary event occurs the volatility drops like a lead weight. This is called a volatility skew..So once the event result is known your options will fall in value before you can sell them..Costing momma more of her money...

The message here is You and I should have hedged the Du trial..but hedging the appeals trial probably the best you can Du (do) is sell covered calls..but you you could lose your position if the AC affirms Amarin..

What to do about Du...The stock market is never easy..You are always one trade away from humility..We all make mistakes...
Facts are the asymmetrical bet this time around is to go long..any PPS drop from a negative AC verdict is not going to change our situation very much...The generics are winning and will continue to be winning..That is what the market is expecting..A win is going to be like the R-I trial and will shoot the PPS up. I am planning on holding my shares and not buying puts..If the decision goes against us I expect a price decline..But I believe we will return to these current levels and eventually go higher. Amarin has a lot of turf outside the USA and that has gone discounted,,

The puts are not likely to pay off to any extent..This will be a classic "volatility skew"..Sometimes doing nothing is what you should do..

":>) JL