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Generate Income With Regeneron Pharmaceuticals (REGN)

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Generate Income With Regeneron Pharmaceuticals REGN

Regeneron Pharmaceuticals, Inc. Credit Spread (Nasdaq: REGN)

TheOptionPlayer.com sets up a Regeneron Pharmaceuticals, Inc. (REGN) short-term (8-day) option strategy. Investors could simultaneously:

Sell the November week-four expiration REGN $265 put for $1.40

AND

Buy the $260 put at $.75

The difference between funds received and paid out is a $.65 per share credit which we keep if Regeneron Pharmaceuticals, Inc. stock closes above $265 on Friday November 22nd, but immediately exit the position if it appears the price will end up lower. If the price gaps lower open the trade using lower strike prices. See Guidelines page at www.theoptionplayer.com/ for explanation on how trade is set up.

 

Why we recommend it:

Regeneron Pharmaceuticals, Inc. (Nasdaq: REGN) a biopharmaceutical company, discovers, invents, develops, manufactures, and commercializes medicines for the treatment of serious medical conditions in the United States and internationally. It has strategic collaborative agreements with companies such as Sanofi and Bayer HealthCare. It has been a phenomenal year for the stock as the company's shares have gained nearly 75% in 2013 so far on the back of some major developments. Regeneron announced solid third quarter results last week and grabbed investors' attention as they bid shares up over 6% immediately after the announcement.

Regeneron stock was punished along with other drug company shares over the past few days after major news announcements discussing published new guidelines for when doctors should prescribe cholesterol-lowering drugs to patients. The concern is whether these new guidelines might decrease the number of people who were on statins to control cholesterol. However, Regeneron and other drug company stocks recovered today after the FDA responded to the new guidelines by announcing streamlined requirements with a lower approval threshold for the next class of cardiovascular medicines.

You can see in the Regeneron Pharmaceuticals, Inc. chart below the stock price hovered above its recent support level last week. Also note how the momentum indicators are trying to turn up after yesterday's bullish price action. Regeneron Pharmaceuticals, Inc. shares have remained above support since September and there is a high probability that Regeneron stock will continue to trade above $265 for another week.

52-Week High: $319.83

52-Week Low: $141.01

Average Volume (3 month):   746,343

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Options Markets Trading Ideas

 

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