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Call Spread on VRX on 4/18/2016

Trading Channel on VRXValeant Pharmaceuticals International, Inc. (VRX) develops, manufactures, and markets pharmaceuticals, over-the-counter products, and medical devices worldwide.

The company offers Solodyn to treat red and pus-filled pimples of acne in patients, as well as Ziana, Acanya, Atralin, Retin- A Micro, and ONEXTON gel; Wellbutrin XL for major depressive disorder in adults; Jublia for onychomycosis of the toenails; Xenazine for chorea; Targretin for Cutaneous T-Cell Lymphoma; Arestin, a subgingival sustained-release antibiotic; and PROVENGE for the treatment of prostate cancer. It also provides Zovirax, an antiviral for recurrent herpes labialis and initial genital herpes; Syprine to treat patients with Wilson's disease; Elidel to treat atopic dermatitis; Prolensa for inflammation and pain following cataract surgery; Duromine, a weight loss drug; and Lotemax gel for post-operative inflammation and pain.

Further, it provides SofLens daily disposable contact lenses; PureVision, a contact lens; various ophthalmic surgical products; Biotrue ONEday lens; medical device systems for aesthetic applications; and Bausch + Lomb Ultra, a contact lens. Additionally, the company offers Tobramycin and Dexamethasone ophthalmic suspension for steroid responsive inflammatory ocular conditions; Cardizem CD to treat hypertension and angina; and Latanoprost for the treatment of glaucoma.

Shares of the beleagured pharmaceutial company have formed a "double bottom" and are heading higher in an upward "trading channel," following replacing the Company's CEO and an internal audit. Shares are volatile as they try to estabilize. We will use volatility in our advantage by trading a spread. We will trade May 20th Options.

52-Weeks Trading Range: $25.27 - $263.81

Last Trade: $32.60

 

Trade

  • Buy 1 May $32.50 Call at $4.70
  • Sell 1 May $36.00 Call at $3.20
  • For a net debit of $1.50

Profit/Loss Analysis

  • Breakeven at $34.00
  • Maximum profit is $200.00 at strike of $36.00
  • Maximum loss is ($150.00) at strike of $32.00

Closing Summary

  • Sold 1 May $32.50 Call at $6.70
  • Bought 1 May $36.00 Call at $4.70

Position closed on 4/22/2016 at price of $2.00 with a 33.33% gain in 3 days.

Updates

4/22/2016 9:35:40 AM

We are taking profits on VRX Call Sread.

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