I just opened some WEEKLY puts for NFLX. With NFLX trading up around 193.3 today, I opened the weekly puts at the strike of 180. This netted 602 using the freed up maintenance from the closed Rimm puts.
The thought is With Rimm trading up today this leaves only 4 days of trading during the rest of this week for it to average over 3pts of stock drop daily. This trade netted a little over 200 above my Rimm puts, but it is only one week instead of two and no major news coming (earnings.)
6 comments:
Closed RIMM too.
Sold NFLX 155 put last week. I'll be in Singapore for a while from Dec 8- Feb 2011.
From $190 to 155 or 160 in 2 weeks? Hubby will take care of them. I should have no problem with internet connection....
i got out of rimm as well this morning. a small profit was taken but sold weekly 165 puts on nflx. i think i should have got a little closer on strike price but netflix is scary right now.. i will just play the safer bet and take 300 profit if trade goes well.
Hi Jerry,
I don't remember if you like longer trades?
CELG Jan. 47.50 puts .50 I will take the stock under 50 any day of the week.. I sold some Dec. 52.50's at .50 today this sell off is overdone. IMHO
Have good trip Hannah-good positions
Fish, nothing wrong with nice safe trades...
Gary, I looked at CELG but don't have a very knowledgeable background. Big drop today. Good luck. I always avoid looking at puts as a way to buy at a discount. Many do but to my way of thinking, before I have to buy it, it would mean that the stock has fallen pretty sever and I don't want a stock that is falling in price.
I know the feeling however CELG is a stock I have followed every day for over 4 years now and is the only reason I put it out there. I also put on a out of the money vertical in Jan.2012 with the put income long term today was a gift.
FWIW what CITI had to say today.
Citigroup Global Markets
North America United States
Biotechnology (GICS) Biotechnology (Citi)
Equities
6 December 2010
Celgene Corp (CELG)
Alert: Mahi Mahi with Yaron at ASH: Putting Myth vs. Reality in
Focus
Conclusion- The bad news is that MM-015 also showed an imbalance of cancer rates but the good news is that the rate is small in this well conducted study. Like every ASH where the stock has a panic, we believe this is a good buying opportunity where the opinion of docs is the polar opposite of investors. So in sum, we like the recent sell off to add to positions given the clear tangible benefit of Revlimid maintenance vs a small rate of new malignancies.
mPFS Benefits in All Pts- In the study, the mPFS was 31 mos (MPR-R), 14 mos (MPR), and 13 mos (MP) across all pts. However, at this point, as seen in all maintenance studies so far regardless of the drug or regimen, there was no difference in 1yr and 2yr overall survival between the 3 arms. The median PFS of 31 mos is unprecedented for Revlimid therapy in this setting.
mPFS Benefits in Pts 65-75 year Old-The greatest mPFS benefit was in pts 65-75 with a 69% reduced risk of progression. In these pts, the mPFS in the MPR-R, MPR, and MP arms were: not reached, 14.7, and 12.4 mos.
Very Small Cancer Imbalance- There was a very small diff in cancer rates. This is encouraging and suggests that higher rates seen in CALGB and IFN may have been due to bone marrow transplants which were not done in MM-015. The rate of new solid tumors were: MPR-R <1%, MPR 3%, and MP 1%. New AML rates: MPR-R 2%, MPR 1%, MP 0%. New MDS rates: MPR-R <1%, MPR 1%, MP 0%.
No Higher Cancer Signal in Maintenance vs Induction Arm- In the MM-015 study, the overall new cancer rate was <4% on MPR-R vs 5% on MPR. So in essence, there were more cancers in MPR arm where pts only got 9 months of therapy vs the MPR-R were pts remained on therapy for likely 2+ yrs. So this shows that maintenance does not lead to more cancers. To put these new cancer rates in perspective, the background new cancer rate is 7%-8% in myeloma pts. So this study is well within this range.
Regulatory Viewpoint- While investors appear panicked that FDA/EMEA won't approve Revlimid for maintenance, the doc community continues to believe that a meaningful PFS benefit even w/o an overall survival is very attractive. In the meantime, across all studies thus far using different drugs and different regimens, maintenance therapy has never shown a survival benefit thus far. Nevertheless, the myeloma field continues to view maintenance as the standard of care and are incorporating maintenance into all important studies. Thus, there is a big disconnect between what docs are thinking and Wall Street's anxiety about lack of survival benefit. To sum this up, docs know that it is very tough to show a survival benefit.
Docs vs Investors Deja Vu Round 3- This appear to be ASH panic deja vu all over again where Wall Street panics while docs do not think the data is a big issue. In this case, there is a clear 60% reduction in risk of cancer at a price of ~4%-5% new cancers (which are within the 7%-8% historical rate of new cancers in myeloma pts). Docs are noting that all pts on myeloma will have their myeloma progress so a 60% reduction is a big win even at a small price of new malignancies.
Celgene Corp
Valuation
Our $73 target price is based on 22x our non-GAAP 2011 EPS estimate of $3.30. We arrive at this multiple by assigning a PEG of 0.9x to Celgene (based on a 2010- '13 CAGR of 23%), which is below the large cap biotech group of 1.3x and at a discount to the S&P500 PEG of 1.2x. We note that a PEG of 1.3x represents a trough valuation for the biotech industry. We believe Celgene deserves to trade at a PEG of 0.9x given the company's strong top- and bottom-line growth that is supported by a deep late stage pipeline. Our supportive DCF analysis, suggests a value of $78, with probability adjustedsales for late-stage pipeline products and conservative assumptions for patent expirations. In our DCF we utilize a discount rate of 6.7% based on a risk free rate of 2.77%, an equity risk premium of 5.84% and a 5-year weekly Beta of 0.8.
Post a Comment