Option premiums are rich in Neoprobe, and one trader is
squeezing income from the trend.
Our monitoring systems detected the sale of 5,000 April 3 calls for
$0.30 and $0.35 against open interest of just 112 contracts.
Overall option volume in the maker of cancer products was 11 times
greater than average.
in those contracts was about 62 percent, higher than most other
contracts in the April expiration month. This suggests that option
prices are relatively high, which could be encouraging some traders
to sell them.
own shares and are selling the calls
as part of a strategy designed to earn income from the
passage of time
. Investors often sell calls and puts on small medical-research
companies because their propensity to move keeps volatility high.
NEOP fell 1.07 percent to $2.77 yesterday. Based on the premium
earned, the investor is now protected more than 10 percent to the
downside and has the opportunity to make more than 20 percent to
the upside if shares push higher.
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