PeakTrader.com

[arthur]

OSIP is a smaller cap biotech (market cap about $2 1/2 billion) that has a pipeline of oncology drugs (treatment of tumors). Currently, OSIP is testing the recent low. Resistance is at the 10 and 20 day MAs. A breakout above the 20 day MA may be bullish.

One strategy is to buy Apr 40 calls and wait for a two point bounce to buy Apr 45 or 50 puts, or sell half of the Apr 40 calls on the bounce. Some combination of calls and puts may be traded, on volatility, to manage risk (in case OSIP falls sharply), while making small gains, and being in position to make a big net gain in case OSIP rallies or falls 20 points.