OSIP Play

This is why fly's on biotech announcements tend to be not as effective. Biotech stocks could double or get cut in half on any kind of FDA news. I guess the backspread I recommended would have worked out quite well.

This stock just goes to show you guys, when front month vols are pumped as high as they are, in many cases they tend to be undervalued, not overvalued.

I'm glad I passed on this play.

 

F*ck you Mav, I reco'd the backspread first

 

I was looking at the offer of the call-fly. It's 90x140

 

Oh, I bought the put fly which was a little cheaper.

 

HD,

Is that OSIP going to break 100 today or what?

 

Sure looks like it. Must be plenty of shellshocked shorts. And I don't think they have a hedge. I'm showing the 60 strike as the highest in the series. Ouch!

 

Okay, I'll start with a disclaimer -- my knowledge of the FDA process in general and OSI in particular is spotty at best, and had very little to do with why I put the trade on. But after watching an interview with OSI's CEO on CNBC just now, I have to say that something doesn't seem quite right. Apparently, OSI is delaying the release of the actual data behind the study results until some big oncology conference in June. That, from what I gather, is highly unusual. Second, Merrill apparently came out with a pretty negative piece on the stock today. While, based on personal experience, I generally don't put much stock in sell-side research, it's rather atypical for typically non-courageous analysts to put out negative notes in the face of this kind of tidal wave move triggered by what seemed to be very good news. Hence, if anyone's seen the piece, I'd be interested to hear what the thesis was.

Any biotech experts out there care to chime in?

 

hi HD. These conferences are big in terms of launching new products which might explain the delay until June. Imagine the effect of showing the clinicals in front of knowlegable medoncs who ARE your customers. Who would you rather break the good news to? ...Assuming it is good news -MAria Bartiromo or the med oncs? Just a thought. Much like Comdex conferences or even the car shows. Vendors hold off for the most dramatic effect.

 

Thanks, GA. That certainly makes sense. So I take it then that this is pretty much par for the course with these studies. Is that correct?