Repros Therapeutics: Circling the Drain to Zero

Repros Therapeutics (RPRX) is a nearly-defunct biotech company best described in ER terms as CTD (circling the drain). Despite this, it spikes periodically on rumors of I know not what. For the last few days it’s had a low of $0.88 and a high of $1.12.

There are options available (unusual for a low-priced stock), meaning you can buy puts instead of shorting. (Shares are hard to borrow and the stock moves fast, so puts are definitely the safer way to play this.) The November 2.5 puts appear to be the clearest play. They have been generally purchasable in the $1.75 area or below. So maximum profit is $0.75 if the stock goes to zero, or more likely $0.70 if the stock trades at a nickel after a bankruptcy filing. Break even is if the stock trades at $0.75 in November. Maximum loss is if the stock trades at or above $2.50 at expiration.