"Well - I bought some as a trade - however my view is that MSB...

"Well - I bought some as a trade - however my view is that MSB has been noticed by a giant, and there is a lot of option value in that, compared to what there was before we knew Celgene had shown any interest.


MarkieMills,

As you probably know, I am both too slow and too lazy to trade actively, although I agree with you fully: the time value of the implied option has indeed gone up. And it has gone up beyond just the time value attributed to an extra six months' of cash burn, so I can't fault your thinking on the odds being in your favour when it comes to backing a short-term trade.

In fact, I'd add to that by saying the option you have bought is collared at around the current price level.

But remember that collar level will decay over time, but at what rate is difficult to predict with certainty, but the amateur option theorist in me says it will "exist" for most of Celgene's six-month due diligence period.

But the intrinsic value of such an option is impossible to quantify.

Good luck with the trade (to be honest, I'm surprised the stock has only responded as mutely as it has).