Tuesday, February 4, 2014

Furiex Pharma (FURX) : Update: How the Option Market Fell Asleep on a Bio-Pharma; And Then Today Happened.

FURX is trading $108.50, up 136% with IV30™ down 55.3%. The Symbol Summary is included below.

Provided by Livevol

This is a follow up to the article I posted on Sunday. You can read that blog by clicking on the title below:

Furiex Pharama (FURX) - The Event is Coming... But the Option Market is Totally Confounded.

Here was the Symbol Summary as of that post:

Provided by Livevol

There were takeaways from that prior post, which I have copy/pasted below:
The option market reflects two things:
1. Exploding overall risk (see that IV30™ chart) into totally uncharted territory.
2. A remarkably agnostic view on the direction of the stock move off of the news coming for FURX.
--- snip ---
3. It could also signal that the OTM options are too cheap and that FURX could be due for a much larger move than that 45% number [priced by the option market].

It turns number three was correct.  The stock has moved 136% today relative to the option market pricing a 45% move in the ATM straddle.

Finally, the Options Tab is included below.

Provided by Livevol

The $45 straddle was priced to ~ $20.  It's now worth ~$63.

Well... there you go...

This is trade analysis, not a recommendation.

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