Replies to post #104496 on Biotech Values

[medchal]

If you watch a lot of expirations over a wide range of stocks and a fairly long time period, I think you'll conclude that expirations will provide no more than a nudge to the stock price.

For example, the source I use for "maximum pain" currently would indicate a $17.50 price tag for MNTA.

[Mpower]

Yes. Like a swarm of mosquitoes attracted towards a warm lantern, the PPS is attracted to the pre-eminent strike-price on expiration day.

[zipjet]

MNTA: do you place any credence into the opinion that options (expiration date today) is playing into current below $15 P/S?

Options are a substitute for owning or shorting the stock and the options positions of professionals and sophisticated investors are hedged in the stock.

So yes - options influence stock price directly and indirectly.

Unfortunately, it is difficult or impossible to determine the direction and magnitude of the influence.

During options expiration week, the stock is often more volatile than at other times. At least that is my observation after 35 years of experience.

ij