Last week, our chief options mentor, Dan Keegan talked about straddle opportunities in BIDU, the so-called "Chinese Google". On Tuesday March 9, Dan will explain that strategy further in a free webinar we are hosting, "Trading Straddles in a Volatile Market". Just click HERE to register. This week Dan looks at another stock that has been on the move, but in the other direction. 

On Wednesday, March 3rd some bad news came out for all of those families who have a member suffering from Alzheimer's disease. Medivation's (MDVN-Nasdaq) drug dimebon fared slightly worse than a placebo in testing. This was also terrible news for anybody who was long MDVN. Its price dropped from its closing price of 40.25 on March 2nd to an opening price of 12.88 the next morning. The current at-the-money impled volatility for April calls is 66.3 which is not a big change, while March volatility is trading around 70.00 - less than half its previous level. This anomoly occurs when there is crop report, earnings report, or as in this case, a drug-effectiveness study. These can be a great opportunities to buy time spreads, but in this case the seller of time spreads would be the winner.

    Meanwhile the VIX closed at the bottom feeding region of 17.42. Where will it close this Friday? 
If you sense that there is opportunity in what Dan says, but you don't understand the terminology or the concepts, just take our course and let Dan or one of our other mentors make it all crystal clear.