This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

You Still Make Money With Onyx

NEW YORK ( TheStreet) -- For outsiders watching, it may appear Onyx Pharmaceuticals (ONXX) shares are equivalent to holding a winning lotto ticket after Amgen's (AMGN) unsolicited $10 billion bid to buy Onyx.

For outsiders with Onyx shareholder neighbors, this Independence Day celebration may turn into a long weekend. I feel for you, and know all too well what a joy listening to a "see how smart I am" dissertation is -- especially from someone who conveniently forgets their losers.

However, shareholders have more, not less, to consider after the first offer was rejected. If you're an average Onyx shareholder, you're probably spending your fair share of time staring at your phone checking the latest price.

A downside of iPhones and other smartphones is the amount of time they enable you to waste checking stock prices 6,587 times a day. If that sounds like you, I have another solution. You should read my thoughts on the probable ceiling price.

Take a look at the August Onyx option chain. For less than $2, you can buy insurance that your shares will be worth at least $120 until the expiration date. Buying a put option gives you the right, but not the obligation to sell your shares at a set price and within a specified time period.

The August monthly options don't expire for over 40 days. The entire offer could fall apart, or Onyx could even go out of business in the meantime for all you care because you know someone committed to buying your shares at $120 at your command.

If the trading stars align in your favor and Onyx is the target of a bidding war, that skyrockets the shares, you remain in the game to profit. Remember, when you buy an option you can sell the corresponding shares at any price you wish, albeit while the option is exercisable -- you have an effective floor.

For many investors, staying in for greater gains while enjoying restful sleep is a winning strategy. For those questioning if 44 days is enough time, I tend to agree that it likely won't be. The November $120 strike price options with 134 days until expiration are about $3.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
ONXX $0.00 0.00%
AAPL $124.43 -1.54%
FB $82.22 -1.18%
GOOG $548.00 -0.73%
TSLA $188.77 -0.94%

Markets

DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs