Another ARNA Option Play

June 21, 2012

This is only if you believe that ARNA’s weight loss drug will be approved later this week (the market sure seems to believe it)…..

Anyway, rather than buying the $11+ stock and writing July $11 call options to take out $2 in time premium for 29 days, I looked at the deep in the money calls for July, and noticed I only had to pay about 40 cents of time premium. So I bought the $6 calls for $5 and change, and sold the $11 calls for $2 and change.

It’s all over the place today, but the net effect has been to pay 40 cents of time premium on the $6 calls and sell $2 in time premium on the $11 calls. Read the rest of this entry »

Short Squeeze in IOC?

June 20, 2012

On a pay-to-play board I frequent, one of the posters has been enjoying a massive run-up in this stock lately.  I was interested, because this stock has been kind to me in the past, though scary at times.  Part of the saga (from 2010) are here, and here, here, here, and here.

While we were discussing the question of the current move in the stock, another member of Valueforum pointed out that a single money manager is buying the stock like there’s no tomorrow.

Two years ago, IOC was potentially sitting on one of the world’s biggest deposits of natural gas, and rumors abounded that they were about to partner with one of the biggest integrated energy companies to bring it up, liquefy it and ship it.  Since then, every hole in the ground in tornado alley in the US has been getting fracked, and the price of gas has collapsed.

Meanwhile, IOC’s potential is still just that — potential. Read the rest of this entry »