Biotech Values

[Double_Bagel]

Problem with Call Options:

I was in an unique situation where a stock was up $2.2 but my now in-the-money option was down $1.2 yesterday. This happened with my Jan 2012 $50 BJ's Wholesale call. On Tuesday the stock was at $48.1 and the $50 call was at $2.45. Yesterday BJ's agreed to be bought at $51.25 so the option value dropped to $1.25 and the stock went up $2.2 to $50.3 (I am not sure why it didn't end up at around $51.25). Luckily, I only paid $1.5 for the option so I have a small loss. I am hoping the share holders reject this offer as it is only a 7% premium. On Tuesday Goldman had said that the stock is worth $60.

http://finance.yahoo.com/q/op?s=BJ&m=2012-01

Now, hopefully this won't happen with MNTA with an offer price of $22.5 or so (hostile takeover attempt). Then the MNTA $20 Jan 2013 call (at around $5.2) would immediately drop to $2.5. I used this example because I own a lot of these calls (purchased while MNTA was in the $15-$18 range). Obviously the $25, $30, $35 call values will all drop to $0 then.

http://finance.yahoo.com/q/op?s=MNTA&m=2013-01

I am curious to know if people consider this possibility while buying options.

Thanks.