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"June 15 is D-Day for Encysive Pharmaceuticals Inc. (Nasdaq: ENCY). It&#x2019;s the day that the Houston, Tx.-based biopharmaceutical firm will find out whether the FDA has finally given the green light to its pulmonary arterial hypertension (PAH) drug, Thelin, after more than a year of review.&#xD;&#xA;If the drug gets approved, beleaguered Encysive could take the lead in the race to get a new PAH drug to market in the United States. Three days later, on June 18, competitor Gilead (Nasdaq: GILD) is scheduled to find out whether its PAH drug, Ambrisentan, gets an FDA nod."-associated press&#xD;&#xA;if approved. stock up 2 dollars likely. its already approved in europe why not?

TheBest · Answer

"June 15 is D-Day for Encysive Pharmaceuticals Inc. (Nasdaq: ENCY). It&#x2019;s the day that the Houston, Tx.-based biopharmaceutical firm will find out whether the FDA has finally given the green light to its pulmonary arterial hypertension (PAH) drug, Thelin, after more than a year of review.&#xD;&#xA;If the drug gets approved, beleaguered Encysive could take the lead in the race to get a new PAH drug to market in the United States. Three days later, on June 18, competitor Gilead (Nasdaq: GILD) is scheduled to find out whether its PAH drug, Ambrisentan, gets an FDA nod."-associated press&#xD;&#xA;if approved. stock up 2 dollars likely. its already approved in europe why not?

wallstreetcappers · Answer

Big$$$,Thats an interesting one-two punch.Here is the one-two win- ENCY wins approval and GILD doesntHere is the one-two loss- ENCY loses and GILD wins.I think any GILD win even with an ENCY win isnt such great news since comparing the two companies is laughable. GILD is a monster with a huge pipleline, deep pockets and instant industry respect..I am a bit shocked at the valuation on ENCY after looking at the balance sheet and financial stats. They have 325M in market cap, 20M in sales and a negative book value...gamble is the right term to use here.

TheBest · Answer

wallstreet the drug is approved everywhere but here how could they reject it.

TheBest · Answer

i realize the us standards are the highest but come on this drug works with very little side effects seems a guarantee here.

TheBest · Answer

"Shares of Encysive are not expensive if you think U.S. approval is right around the corner and if you believe Encysive can do well against the potential competition from Gilead&#x27;s (Nasdaq: GILD) ambrisentan, which will be up for approval three days after Thelin. But how the FDA will handle Encysive&#x27;s approvable letter response is anybody&#x27;s guess, since investors don&#x27;t have any idea what is delaying Thelin&#x27;s final approval. Without this sort of clarity, shares of Encysive are too risky for me at this point"&#xD;&#xA; &#xD;&#xA;i think this states it will if approved i think stock goes to 6 but if not 2.50 so the risk is very high with not a very high upside. pozn on the other hand has a huge upside potential. omg biotech is so damn risky ws.&#xD;&#xA;i even get a little worried. usually i always jump in but i admit i am scared here.

TheBest · Answer

i think watching the chart may give us a clue as to approval or not.

wallstreetcappers · Answer

Big$$$,Yep you nailed it..the FDA has a higher standard for approval, or so they say.I wonder with the market cap and the miserable financials if the move would really push the company up that much. They have almost 100M shares out and they have triple the debt to cash and very little other assets.Its a junk company for sure, but if they get approval I imagine it should take the stock higher.I actually think the right play here is to BUY the stock and SELL the July 5 options. If you sell the contract, your basis is 3.50 or so if it tanks..if they win and the stock goes up, you get the buck in premium AND the 30 cents in strike..thats 1.30 return on a 4.60 stock...hardly a bad deal. 30% upside might not seem sexy but it sure protects you on the downside.Oh and the action on the July options is crazy..6k contracts traded today.

TheBest · Answer

wow!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

TheBest · Answer

thanks walls im on that trade&#xD;&#xA;!

wallstreetcappers · Answer

Big$$$,Which, the covered call trade? I think even if it imploded on you, the trade would work out longer term..Anyone see that huge headfake? market goes green and then dumps fast..yucck.The 10yr has moved in a huge fashion, it might be why some money is coming to the sidelines, yields are getting more attractive compared to stocks..

TheBest · Answer

Anyone see that huge headfake? market goes green and then dumps fast..yucck&#xD;&#xA;ya up 5 to down 124 wtf this is crazy

AZGrinder · Answer

I did a buy/write on this and it hasn&#x27;t filled yet?  Should I have bought the stock by itself first then sold the calls?  First time ever trying this....

AZGrinder · Answer

Buy 500 ENCY Debit 3.52 Day Only None 10:24 am 06/14/2007 &#xD;&#xA;SCO 5 IQEGA &#xD;&#xA;&#xD;&#xA;Buy Write Status: OPEN

AZGrinder · Answer

hope thats right? I guess I should give it more than 7 minutes to fill..still waiting.

wallstreetcappers · Answer

Grinder,Are you with Scottrade? If you are then give them a call. The issue might be the net debit. If the number isnt right then the trade might not go.Did you get it filled?

AZGrinder · Answer

Not filled yet, raised my limit price to 3.58 net debit to see what happens.  the bid on the calls is 1.00 and ask on stock is 4.56 for debit of 3.56 but I was told it must hold for 1 minute.

AZGrinder · Answer

I should do too seperate orders but im cheap and want to save on commision

wallstreetcappers · Answer

Grinder,You might try to get the stock, then add the options.I think the issue is the bid/ask on the options, plus the stock has moved pretty big off the lows. If you had bot the stock first then the debit would even be smaller...

AZGrinder · Answer

I just ran some numbers (hope they are right) but this seems like a trade that is too good to pass up.&#xD;&#xA; &#xD;&#xA;Here is what I got 500 shares @ 4.57  -2292.96&#xD;&#xA;Sold 5 july 5&#x27;s @ .95 &#x2B;471.99&#xD;&#xA;Commisions -18.92&#xD;&#xA;Total Debit  $-1839.89&#xD;&#xA; &#xD;&#xA;I have a good feeling about this trade...Thanks for idea WS.  I think this might be the way to go for me for awhile since its less risky.

wallstreetcappers · Answer

Grinder,Let me tell you that there is no guarantee this sucker doesnt crap out on that FDA decision. If it does, that premium will protect you to the downside.What I hope happens for you is the stock gets called out and you keep the premium and the difference in strike and stock..so that would mean 43 cents plus 95 cents and that would mean almost 30% after fees.Well my AAPL options trade is another loser, good thing I didnt get full fill or it would be worse.Options trades are VERY hard...thats 0-2 lately.

AZGrinder · Answer

If it craps out I can keep selling new calls until something eventually happens...right?&#xD;&#xA; &#xD;&#xA;on my realized option trades I have 4 winners and 11 losers&#xD;&#xA; &#xD;&#xA;on my unrealized options trades I have 1 winner and 4 losers&#xD;&#xA; &#xD;&#xA;total 5 winners and 15 losers! &#xD;&#xA; &#xD;&#xA;VERY hard is damn right!!!!!!!&#xD;&#xA; &#xD;&#xA;One think is for damn sure, I have learned some very expensive but valuable lessons.

wallstreetcappers · Answer

Grinder,Here is the lesson I learned and TRY to live by..but somtimes I fail,like with the AAPL trade here.If you are trading options, go OUT and IN..PERIOD.Going near strike and close in time puts the odds greatly against you, and that is a fact.

AZGrinder · Answer

OUT and IN right.  No doubt about it.  I think it finally sunk in to my brain!&#xD;&#xA; &#xD;&#xA;Now, how about these covered calls.  Lets say at expiration stock is under 5.  Would you sell new calls or dump the stock and take profit if its there?

TheBest · Answer

i think ency gets approved from the action in the chart&#xD;&#xA;it sold off then rallied heavily mid day suggesting an approval. gigantic volume i think approval is likely.

wallstreetcappers · Answer

Grinder,If the stock finished CLOSE to the strike, then I would keep selling the CCs. You arent talking a ton of money and depending on the movement in the stock, you could even be so lucky as keep the stock, it rallies to the next strike and sell those..But thats a pipe dream..hahaBig$$$...where are those WNBA games??????????????????????POZN moving up more...

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