Option expiration appears to be in play finishing out this week. Jake, you ought to appreciate that, LOL!
I did a quick tally of options, both calls and puts, as of 14:26 ET today. Not surprisingly, the current share price about straddles the pps that would deliver the minimum payout when December options expire after the close on Friday. Absent news and going into the holidays, this seems like as good an explanation as any for the pps coasting while we await news of the MOS results from trials.
Here is the tally (someone check my math?)
Dec 22 2012 shows 393,600 calls and 145,100 puts.
Why say the pps straddles the soon to expire options? A $1.25 share price places 130,200 calls in the money and 108,100 puts out of the money. Puts in the money are only 37,000 shares. If the share price increased twenty five cents, another 175,300 calls come in the money while 19,400 puts drop out of the money. If the share price decreased twenty five cents by the end of the week, 106,100 puts come into the money and 118,200 calls fall out of the money. Since the options straddle the current pps about +/- 25 cents and moneyness changes about the same proportion going up or down, I can see the pps seeking to finish the week at between $1.00 and $1.50, favoring the low side of that range to minimize options payout.
Here is the overall tally:
Expiration Call Option shares (100X in) Put Option shares
Dec 22, 2012 393,600 145,100
Jan 19, 2013 3,285,800 608,100
Apr 20, 2013 5,767,700 414,300
Jul 20, 2013 188,200 23,200
_____________ _________ ________
Total options 9,636,300 1,190,700
Most of the call options have a strike price in the money if the pps rises to $5 pps and most of the put options have a strike price in the money if the pps falls below $1.
Best wishes and IMO.
KT
