Replies to post #722 on Ariad Pharmaceuticals Inc fka ARIA

[Whosetosay]

Agreed, they are all good. The traders out there (I am not currently in trading mode) should be looking at selling the covered calls.

Buy stock @$2.70, sell Jan 11 $3 @.70/.65, if the stock goes to $3 or more, you make 33%, 66% annualized. Protection to $2.

Is the stock worth $2 even if SUCCEED doesn't? Yes. COH at y/e is .50 a share, 534, 113, othe rida indications, etc.

[chazzzzz]

Implied volatility is quite low right now as compared to recent history. The Nov. 2.5's have a theoretical value of .682 and a delta of .6774. The Aug 3's have a theo of .247 and a delta of .4519. In other words, the options are priced fairly and could be considered a good buy. To sell options at this point is not good because of the low volatility. You need high volatility to sell.

I would go for the high delta in the money calls and sell calls against my position in a rally. I am looking at adding more Jan 12 2's if I can get them under $1.40. That gives me 18 months to be right. Trying to get filled at your price has always been tricky with Aria. The option makers are definitely out to nickel and dime you.

Be careful and do not try to buy into the ask. I always try to middle them or time a morning downdraft.