VRTX is a drug company that's come out with a new cystic fibrosis drug that's under review by the FDA.
The announcement by the FDA on whether they will approve the drug or not is set for May 12.
It is likely they will approve it's use:
CF disease has few drugs available for treatment.
The CF foundation was involved in the testing of this drug and is backing approval.
The precursor of this drug is already on the market and works for specific CF patients.
If the drug is approved, the stock should jump. This is a volatile stock. In the last 3 months its gone from $110 to over $135, back to $115 and then back up over $135 again. After hours yesterday, they reported a bigger loss than expected, so the stock price dropped. It was already going down after rumors that it will be bought out were quashed.
My play.
I expect the drug to be approved. I hope it will pop up to at least $137, the high it hit twice in the last 3 months.
I bought call options that expire on May 15. 3 days after the FDA announcement.
I bought calls that the option + the premium cost less than $134. That gives me $3 each one profit.
Or I could loose the entire amount.