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.

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