Avid Bioservices Inc (CDMO)

[investingdog]

<< Someone spent $40,500 today to buy 400 July 1.50 calls at 1.05 today. >>


That is most likely a part of the spread, a low risk conservative trade probably by professionals.

What you do is buy July 1.5 calls for $1.05 and sell July $3 (or some other OTM call) for $0.50.

Net cost is 1.05 - 0.5 = 0.55 which is also your max loss.

Your max profit would be 3 - 1.5 - 0.55 = 0.95 or 73% assuming the stock is at 3 or higher in July.

If you buy the stock at 2.1 and it goes to 3 you have 42% profit.
Max loss could be considerably higher if the stock tanks, so could max profit if the stock goes above $3.

The trader is apparently less enthusiastic about PPHM the we are on this board and is satisfied with 73% gain in 5 months while reducing the risk.