Looking for stocks with high IV ranks, none other than BMY popped up with 60%. Its vol didn’t drop much after last week’s decent earnings, perhaps due to the uncertainty around its Celgene (CELG) bid. BMY’s price did fall a bit, though, and has underperformed the broader market. As BMY has some of the more popular cardiac drugs, I’m a user of at least one BMY product (Plavix) and mercifully avoided needing Coumadin. I understand its benefit if it’s keeping you vertical, but it’s pretty tough stuff. Hey, if BMY can make money off rat poison, more power to it. If you think that it’s unwise to bet against Big Pharma and that BMY might rally back from its little sell off, the short put vertical that’s long the 45 put and short the 46 put in the March expiration with 45 DTE is a bullish strategy that collects a credit 1/3 the width of the strikes, has a 67% prob of expiring worthless, and generates $.22 of positive daily theta.
Opened 19/01/29 for $.32 credit
Closed 19/02/05 for $.18 debit