$0.65 Stop Limit triggered on the OPK July 20 calls.
Dear Momentum Options Subscriber,
In an all-stock deal, Opko Health (OPK) announced that it has acquired Bio-Reference Laboratories (BRLI) for roughly $1.5 billion.
Bio-Reference Laboratories shareholders will get 2.75 shares of Opko Health stock for each share of BRLI they own.
In these types of deals, the acquiring company usually sees its stock price decline, and today’s pullback in OPK has triggered our Stop Limit.
Opko Health (OPK, $17.76, down $1.36)
OPK July 20 calls (OPK150717C00020000, $0.50, down $0.40)
Entry Price: $0.60 (6/2/2015)
Exit Target: $1.20
Stop Target: $0.65 (Stop Limit)
Action: Shares of OPK were volatile in today’s pre-market action, as they traded north and south of $19 ahead of the open. News of the merger hit Wall Street as we were going to press this morning.
The options opened at $0.75 and have traded to a low of $0.35. The action triggered the $0.65 Stop Limit on our OPK July 20 calls in the process, and we are now out of the position.
Although I’m disappointed that our 50% return evaporated overnight, the Stop Limit protected our remaining profits.
This was a great acquisition for OPK and one that will transform the company. We will be back to play OPK once the dust settles from the merger news.
All prices given in this update are current as 10:40 a.m. EST.
I hereby disclose that I will be participating in the aforementioned trade(s). Every new Momentum Options recommendation is listed with the price at which I entered my own position. If the price is slightly different than my recommended entry or exit price when you receive the alert, don’t let that keep you from getting into or out of a trade. Occasionally, you might even get a better “fill” price than what is posted in the Open Trades and Closed Trades.
Editor and Chief Options Strategist