Initially few OP readers mentioned about these two companies that have very very high volatility due to pending FDA announcement about their major drugs. Today I was surfing elite trader and I found similar discussion on the forum so I decided why not we take this discussion right here at OP. In some ways, this IV inflation is similar to earnings announcements that I have extensively covered in several posts in the past using two option trading strategies i.e. back spread and diagonal back spread. One key difference for AGIX/ BMRN vs. earnings is that till the time news is not out IV will be continued to rise and then right after the news is out, IV will crash.
Keep pouring in your ideas and we will cover the discussion via open dialogue in the comments section. I shall soon share risk/reward analysis and some ideas on how to benefit from this opportunity. Stay tuned.Profitable trading, OptionPundit