Stock / Symbol: Amarin Corp / AMRN
Option Strategy: [private_monthly]bear call spread[/private_monthly];
Price at trade post: $5.40
Reasoning: Last week, AMRN got hit with some negative findings from the FDA regarding its Triglyceride lowering drug. It seems that the Street is betting that the stock's hit was an overreaction but I do think it's unlikely AMRN will finish over 8 by this Friday. To play this thesis, I'm putting on a[private_monthly]bear call spread[/private_monthly]. This trade's Greeks are: -78 delta, 23.9 theta, and -0.36 vega. The probability of success on this trade is 85%. If AMRN trades [private_monthly]up to $8, we'll stop out of the trade.[/private_monthly]
Trade Details:[private_monthly]
STO -5 AMRN Oct13 8 calls
BTO 5 AMRN Oct13 10 calls
for a min net credit of $0.20 per contract. (day order, limit order). The current mid is $.22.
Requirements:
Cost/Proceeds ($100)
Option Requirement $900
Total Requirements $900
Estimated Commission $15
[/private_monthly]
Max Risk: $900
Max Reward: $100 or 11%[private_monthly] between $0 and $8[/private_monthly] by Oct 18[private_monthly]
Profit Range: 0 to $8.15 by Oct 18
Suggested Upside stop: @ $8.00
Suggested Downside stop: NA
[/private_monthly]
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