It crashed hard. It has had crashes like this before. Yet it's not a company that is going to go away. They still have sales in the billions of dollars.
When the dust settles this stock might gain back what it has just lost. Would I be rushing in to play the upside. Short term no but maybe long term.
It looks like Eli Lilly fell in sympathy.
Can you play Eli Lilly for a bounce back up? Look at it's chart. It's wild. Here is it's thirty day chart.
Knowing that Novonordisk crashed yesterday and knowing that Eli Lilly took a slight hit also creates an opportunity. Novonordish woes are not Eli Lilly woes. Here is how Eli Lilly is trading in the premarkets this morning. It's up ten dollars.
Options can be used as a vehicle to make money on causal relationships.
Now for one caveat. Playing options on stocks in the $750.00 price range is next to impossible. Why? Well the premiums are crazy expensive. Here is an example of how one series of it's the Calls is traded on the opening.
At the end of the day this gain was all lost.
When you have to shell out like $1,000 for one contract to make a 25% return, it's is not worth the effort and the risk. It's better to trade options on stocks like Caterpillar, Boeing and Walmart in lower price ranges. They can be equally rewarding without such large upfront costs.
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