Look at the balance sheet, it's fine. Technically strong and there are no signs that it won't recover. I heard that some analytics still have price target $200. What do you think about it, folks?
VRX options are very lightly traded in Canada, b/a spread, way too wide. U.S. looks more liquid, plus a lot tighter. Though vol at 74% is lower than historical 92%, in the last 6 months vol has touched in the high 20%'s. Vega could crush if going long. Maybe a synthetic long put straddle. buy 1 underlying stock buy 2 ATM puts (front month) Kind of expensive, but pretty safe, and lucrative, if you think VRX is going north in the very near future. If it goes south, you'll still make money, but not as much. Worst thing that can occur, it trades sideways. That happens more than I like, but it keeps the losses to a minimum. If you do it, let me know, very interested. Cheers!
You could go short, however, the reason for the long play is, the potential for profit is unlimited, and the possible loss is capped, and the original post is looking for a strong upward movement.
I think you guys should plug some numbers into an options pricing model. You'll discover that if the stock drops 20% in the near term, those short puts are going to crush the position enormously. Of course if the stock continues to go up albeit slowly, you've got a winner.
Here is an example taken from the Option Guide Please dissect what is right and or wrong with this strategy. This is a life long learning experience for me. Cheers!
You need an option price profiling tool similar to what Thinkorswim or Interactive Brokers has. Then you can "see" how the position changes for various price scenarios. A picture is worth a thousand words....especially with complex options positions.
Well, I do use an option calculator, in fact two. Since it appears my suggested trade is lacking something that has you taking a negative bent, please, present a detailed trade that is superior to the original post or show where the weakness is in mine. This request has no overtones, just keen interest. Cheers!
Well, VRX was not up much today relative to the indices.....that does not bode well for the bulls. Appears the short covering rally is ending soon. I think selling straddles in here may be appropriate right after the fed announcement. This puppy is going nowhere IMHO.