Replies to post #1398 on Pozen Inc. (POZN)

[The_Free_Nebula]

No...That is the strike price bUrRpPPP! Qouted. Actually he did not say how much he paid for each option contract...Of course the price varies...So as an example...Suppose one of those May $12.50 contracts is quoted to cost $1/contract x 140 contracts x 100 since that is howw many shares are leveraged...It would have cost him $14,000.00 for the investment...

If all goes well he is could be selling them between 5 - 10 bucks per contract..BTW don't get confused about the strike price in the equation. the bet is that POZN will be $12.50 or more before the options expire (3rd friday in may)...The stock was frozen at $13.15....he is already in the money

Go here for options info...No you did not ask but I was passing through

http://www.cboe.com/LearnCenter/Tutorials.aspx

[kookiekook]

No, you misunderstood me,

Closing price of a POZN 12.5 May Call Options was $1.50 so the cost at Friday's close for 140 of thoose options would have been $21000.00

Assuming that the price rises to $5.00 for each option then they are worth $70000.00

POZN 12.5 May Call Option is read as follows:

Underlaying stock = POZN
Option excercise price = $12.5/share (ie you have the right to buy 100 shares of POZN at the cost of $12.50/share)
May = Excercisable date always third friday of the month, date by which the option must be excercised or it loses all value
Call = Right to buy whereas Put= right to sell