Volatility, Dendreon, and Elan

Well let's tackle the day.

On my QQQQ volatility play a couple posts ago, I had bought 2 April $30 calls for $310 total and sold 3 April $31 puts for $350. Yesterday the calls would have been sold for $660, while the puts were worthless, and held for today in case the market tanks (which does not look like it will happen). So this play was an exact net gain of zero, taking commissions into account.

A couple notes on this. The 2x3 nature is an odd play. If it doubles to the calls, it may or may not be profitable. If it doubled to the puts, I would have had an easy 25% or more return. I only gave myself two weeks on this one, and typically I'd go for the "month out" expiration rather than the upcoming one. Finally, playing the QQQQ is probably a mistake, as there is QID and QLD; exchange traded funds which double the percentage returns of the QQQQ. So utilizing options, a double is more easily found.

Dendreon:
They will be presenting the IMPACT Provenge results at the American Urological Association meeting on April 28th. The CEO has said the results are "robust" and "unambiguous", so I have no doubt they easily cleared the 22% HR needed for statistical significance.

Elan:
Biogen announced earnings last night and said Tysabri growth was in line with expectations -- neither bad nor great. They now have about 39,800 patients worldwide -- if they are going to hit 100K patients by the end of 2010 then we really need a kickstart in the next couple quarters -- but it probably will not happen. Who cares? Slow and steady growth is fine for me -- and we are past the "blockbuster" status of $1B in sales now. Bring on 75K patients!

Regards,
Trond