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Post by mnholdem on Jan 15, 2016 13:10:00 GMT -5
For the past few years, so many thought that 2016 LEAPS seemed the way to go. Many option contracts were purchased and, as I post this today 697,297 contracts for call options remain open, ranging from a $0.50 to $20 strike price.
Those contracts are the equivalent of 69.5 million shares of MNKD and for some time I wondered where MM could come up with that many shares if these options were exercised (if a BO were to occur, for example). Well, it's a moot point after today, but I wonder if there will be upward pressure after the options for nearly 70 million shares expire.
I also wonder if other biotechs also have large open interest in the Jan 2016 calls. The biotech sector took a beating the 2nd half of 2015 and most of those stocks are in the red again today on this options Friday.
Could Monday bring the beginning of change or is this just business-as-usual cycles common in biotech? |
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Post by babaoriley on Jan 15, 2016 13:20:39 GMT -5
Yup, and next month those lovely warrants will expire worthless, absent a miracle. I traded those quite a while back for Jan 2017 call options, smart, but not smart enough! Today, my fellow posters, with respect to MNKD stock, we are seeing what is often called a "flight to quality" in the midst of this raging market sell off!  I hope CNBC is noting same! |
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Post by matt on Jan 15, 2016 13:33:02 GMT -5
Those contracts are the equivalent of 69.5 million shares of MNKD and for some time I wondered where MM could come up with that many shares if these options were exercised The market maker (typically) is not party to the option contract so they don't have to come up with the physical shares. In most cases people don't really want the shares; hey are happy to close out the option position for cash equal to the difference between the strike and the closing price at expiration. Ultimately, unless you really want to hold the stock long term just cashing out gives the return on the position without the brokerage fee for unloading the shares. Win-win for everybody involved. |
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Post by kc on Jan 15, 2016 13:48:42 GMT -5
How do you view Jan 2018 $1.50 options? Bear or bullish.
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Post by factspls88 on Jan 15, 2016 13:49:40 GMT -5
Mindblowing. I stay away from options.
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Post by dreamboatcruise on Jan 15, 2016 13:50:07 GMT -5
For the past few years, so many thought that 2016 LEAPS seemed the way to go. Many option contracts were purchased and, as I post this today 697,297 contracts for call options remain open, ranging from a $0.50 to $20 strike price.
Those contracts are the equivalent of 69.5 million shares of MNKD and for some time I wondered where MM could come up with that many shares if these options were exercised (if a BO were to occur, for example). Well, it's a moot point after today, but I wonder if there will be upward pressure after the options for nearly 70 million shares expire.
I also wonder if other biotechs also have large open interest in the Jan 2016 calls. The biotech sector took a beating the 2nd half of 2015 and most of those stocks are in the red again today on this options Friday.
Could Monday bring the beginning of change or is this just business-as-usual cycles common in biotech? I guess I'm only half as dumb as those that have $20 strikes. Though I'm still hoping for a buyout over $10 within the next couple of hours. |
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Post by phantomfj on Jan 15, 2016 13:55:22 GMT -5
For the past few years, so many thought that 2016 LEAPS seemed the way to go. Many option contracts were purchased and, as I post this today 697,297 contracts for call options remain open, ranging from a $0.50 to $20 strike price.
Those contracts are the equivalent of 69.5 million shares of MNKD and for some time I wondered where MM could come up with that many shares if these options were exercised (if a BO were to occur, for example). Well, it's a moot point after today, but I wonder if there will be upward pressure after the options for nearly 70 million shares expire.
I also wonder if other biotechs also have large open interest in the Jan 2016 calls. The biotech sector took a beating the 2nd half of 2015 and most of those stocks are in the red again today on this options Friday.
Could Monday bring the beginning of change or is this just business-as-usual cycles common in biotech? I guess I'm only half as dumb as those that have $20 strikes. Though I'm still hoping for a buyout over $10 within the next couple of hours. you and me both! A pox on buying options, I say! |
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Post by LosingMyBullishness on Jan 15, 2016 13:57:24 GMT -5
Thanks. Some comfort that I am in good company. I had calls ranging from $1-9, all beside $9 where well 'in the money' when I bought them.
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Post by cjc04 on Jan 15, 2016 14:04:59 GMT -5
For the past few years, so many thought that 2016 LEAPS seemed the way to go. Many option contracts were purchased and, as I post this today 697,297 contracts for call options remain open, ranging from a $0.50 to $20 strike price.
Those contracts are the equivalent of 69.5 million shares of MNKD and for some time I wondered where MM could come up with that many shares if these options were exercised (if a BO were to occur, for example). Well, it's a moot point after today, but I wonder if there will be upward pressure after the options for nearly 70 million shares expire.
I also wonder if other biotechs also have large open interest in the Jan 2016 calls. The biotech sector took a beating the 2nd half of 2015 and most of those stocks are in the red again today on this options Friday.
Could Monday bring the beginning of change or is this just business-as-usual cycles common in biotech? I guess I'm only half as dumb as those that have $20 strikes. Though I'm still hoping for a buyout over $10 within the next couple of hours. [ Can't believe you were so foolish to think we'd be over $10. A total gamble on your part, probably only paying pennies for the contracts. I, on the other hand, played it safe 8 months ago and loaded up on $4 and $5 options contracts happily paying .85 and .55 each. (Greedily also thinking we'd be over $10) |
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Post by mnholdem on Jan 15, 2016 14:09:25 GMT -5
Those contracts are the equivalent of 69.5 million shares of MNKD and for some time I wondered where MM could come up with that many shares if these options were exercised The market maker (typically) is not party to the option contract so they don't have to come up with the physical shares. I guess that I was thinking along the lines of this reference:
Define: Market Makers
Market makers are individuals or corporations that are charged with the responsibility of creating markets and maintaining liquidity in the options market.
In fact, when you buy or sell options, you are doing so with a market maker and not with another investor. This is how the market maker system maintains liquidity in the options market. Without market makers, it might often be impossible to sell options that you own due to not having another investor on the other side asking for the same options contract at the same time.
Source: define.optiontradingpedia.com/define_market_makers.htm
---
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Post by joeypotsandpans on Jan 15, 2016 14:10:25 GMT -5
Yup, and next month those lovely warrants will expire worthless, absent a miracle. I traded those quite a while back for Jan 2017 call options, smart, but not smart enough! Today, my fellow posters, with respect to MNKD stock, we are seeing what is often called a "flight to quality" in the midst of this raging market sell off! I hope CNBC is noting same! Truer words cannot be spoken, you may have been typical Baba sarcastic but I'm not |
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Post by therealisaching on Jan 15, 2016 14:12:21 GMT -5
How do you view Jan 2018 $1.50 options? Bear or bullish. If we get a touch of concrete good news I would be very bullish. |
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Post by kbrion77 on Jan 15, 2016 14:47:24 GMT -5
How do you view Jan 2018 $1.50 options? Bear or bullish. If we get a touch of concrete good news I would be very bullish. I'm in this stock for the long haul but for entertainment purposes it would be awesome to see a TS press release at 3:30. Let chaos ensue haha. |
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Post by mnkdmorelong on Jan 15, 2016 16:17:50 GMT -5
For the past few years, so many thought that 2016 LEAPS seemed the way to go. Many option contracts were purchased and, as I post this today 697,297 contracts for call options remain open, ranging from a $0.50 to $20 strike price.
Those contracts are the equivalent of 69.5 million shares of MNKD and for some time I wondered where MM could come up with that many shares if these options were exercised (if a BO were to occur, for example). Well, it's a moot point after today, but I wonder if there will be upward pressure after the options for nearly 70 million shares expire.
I also wonder if other biotechs also have large open interest in the Jan 2016 calls. The biotech sector took a beating the 2nd half of 2015 and most of those stocks are in the red again today on this options Friday.
Could Monday bring the beginning of change or is this just business-as-usual cycles common in biotech? There are many ways to play options and most do not contemplate assignment of the derivative. A covered call is a simple example where the stock is already held by the option writer. A call spread combines a long and short option positions wherein the profit is derived by a rise in the long call's price. No stock trade hands when these positions are closed. Then there is the short call position that if and when assigned, results in a short stock position. I think most MNKD call options are used as a hedge against short MNKD stock for which there is many. |
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Post by babaoriley on Jan 15, 2016 16:54:52 GMT -5
Yup, and next month those lovely warrants will expire worthless, absent a miracle. I traded those quite a while back for Jan 2017 call options, smart, but not smart enough! Today, my fellow posters, with respect to MNKD stock, we are seeing what is often called a "flight to quality" in the midst of this raging market sell off! I hope CNBC is noting same! Truer words cannot be spoken, you may have been typical Baba sarcastic but I'm not Hey, Joey, you know it was baba sarcasm, but it was awfully nice to see. Hope you and your Vegas guys are well, this whole thing has been, shall we say, unsettling. We took the risk and got the reward, but the reward hardly lasted long enough to sniff it, much less ingest it,now we've got the risk again! |
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I hope CNBC is noting same!
