ITMN: FDA Panel Recommends Approval

Discussion in 'Trading' started by livevol_ophir, Mar 10, 2010.

  1. livevol_ophir

    livevol_ophir ET Sponsor

    Details, skews, vols, charts, prices, trades here:

    Original Post on 2-1-10: <a href="">CLICK HERE</a>.

    ITMN is trading 38.06, up $14.76 - but really up $23 or 150%+. The IV30&#8482 is down from ~210 to 72 or 65%.

    The news was obviously good:
    Their drug was recommended for approval to the FDA by the panel. This is the second huge mover in bio-tech in a row - the other was MDVN (blog <a href=""><b>HERE</b></a>). In this case, though buying the straddle and selling the wings was a winner - the real winner was just buying the wings. i.e. it went counter to the "standard" approach to trading bio-techs (if such a thing exists).

    The Options Montage from the old post is included (in the article).

    The company has traded over 42,000 options in the first 20 min today on total daily average option volume of 16,343. The order flow is nothing exciting in terms of forward looking opportunities - they are essentially closing short puts. Note the prices below - all closing for pennies. The Stats Tab and Day's biggest trades snapshots are included (in the article).

    The Charts Tab (6 months) is in the article. The yellow shaded area at the very bottom is the IV30&#8482 vs. the HV20&#8482 vol difference. You can see the stock pop and vol drop.

    I've included the Skew Tab snap as well (in the article). The shape is starting to look like a normal skew - what's sometimes interesting to see is the actual process of price discovery. The kinks in the skew are evidence that discovery hasn't yet completed. This is common when stocks move huge an vol events. I'll try to post an updated skew later which should be smoother.

    Skew Legend:
    Red - Front month
    Yellow - Second month
    Green - Third month
    Blue - Fourth month

    This is trade analysis, not a recommendation.

    Details, skews, vols, charts, prices, trades here:
  2. Who let the "cat out of the bag" yesterday and Monday? :confused: :eek:
  3. livevol_ophir

    livevol_ophir ET Sponsor

    That was weird - it looks like it traded briefly, then halted - I'm surprised those weren't busted (or maybe they were)...?
  4. The Market Survellance Department is busy looking into it......I hope. :(
  5. livevol_ophir

    livevol_ophir ET Sponsor

    Me too... let me know if you hear anything - I'll update the article.