The Money Tree

Safely Generating Income in Retirement

New Trade – MYGN

Posted by mounddweller on March 29, 2010

All,

I executed my trade in Myriad Genetics this morning.  The stock was bouncing all over the place at the open as was the option pricing.  One thing I didn’t note in my original write-up is that the options for MYGN are fairly thinly traded.  Thus, the bid/ask spreads are very wide.

Here’s the trade I entered:  I did a buy write on 300 shares (as opposed to the 400 I referenced in my last post) for a net debit of $24.25/share. 

The trade executed as follows:  Bought 300 shares MYGN at $24.68.  Sold 3 APR $25 calls at $0.55.

This makes my ROIC 2.22% if unassigned (0.55/24.68) and  3.53% if assigned ((25 – (24.68-0.55))/24.68).  Those aren’t bad numbers given there are only 19 left to APR expiration.

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4 Responses to “New Trade – MYGN”

  1. Jeff said

    Troy,

    Did my due diligence and like your choice.
    I just purchased at $24.39 and sold Apr2010 $25s @ $.43

    Good luck to us!

    Jeff

  2. mounddweller said

    Jeff,

    You got in at a good price. I entered my trade too early, right after the opening bell. I should have waited to see what it was going to do. Still happy with the trade though. Good ROIC for a short time to expiration.

    Regards,
    Troy

  3. Scott said

    Solid pick Troy – I’m just slightly longer on it than you are, with a position on 8 May 15s bought for $9 and 4 May 26 sold at $1.80. I took the position in January and so far all my calls have expired worthless as the stock keeps bouncing.

    I agree on watching for a pullback…and hoping its not in April! I love MYGN and what they do, and I’m having trouble understanding why the rally in all sectors hasn’t taken them back above the $30 mark. Their new product rolls out in April, so I’m thinking the summer reports will be better than those coming in May. Watch the bad press on their patent of a gene being struck down…there is still rumblings, although I don’t see them carrying much weight. Downgrade today never helps, but hopefully everyone reads the details and sees it was from Outperform to Perform (I agree btw).

    If you are not too hesitant to dabble in the biotechs, have you looked at GILD? Good stuff as well, and hasn’t rallied too much lately. I have a few covered calls in May with them as well.

    Good luck to all of us!

  4. Irene said

    Sold 2 24.00 april puts today @ .60 +$108.05 on MYGN
    Thanks for your research. Tried to sell 22.50 puts yesterday (good prices)
    Looks like price is going back up.

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