set caps on lock: FIRE
DO NOT BUY THE OPTIONS TODAY!
THIS POST IS MEANT AS A HEADS UP FOR A COMING TRADE THAT WILL REQUIRE SKILL, TIMING AND LUCK.
The stock is trading at $61.02 up 6.12% after hitting an all-time high of $62.78 earlier in the day.
The lock up period for insider sales ends on January 20. The near series options expire on January 22, the February's on the 19th.
The Jan. 55's currently $2.95-3.10 or the Feb. 50's currently $3.90-4.10 would seem to have the best risk/reward characteristic.
These prices are for reference purposes, THEY ARE NOT SUGGESTED ENTRY POINTS.
The major negative is Headline Risk: because the company is not in production the stock moves on hypen'tout.
An announcement similar to the Hitachi* or Sumitomo** deals would have the carnival barkers out in force and could move the stock 5-10% against you before the selling starts.
This is real money in play and the insiders will do anything short of actually showing an operating profit to keep the stock up. For example, this, from Reuters, Dec. 30:
Molycorp in Talks with More JV Partners: CEO
Here's the prospectus.
There's also an S-8 for
4 million shares at $22 somewhere.I was working from memory, the actual numbers are 4,112,685 at $21.73. Here's the filing.
Here's the most recent 10Q.
**Molycorp and Sumitomo Agree to USD$130 Million Equity and Debt Investment in Molycorp in Exchange for Rare Earth Supply Agreement