Trading RM, LLC.

This morning there was a news story that a director from BioMarion Phamaceutical Inc. (BMRN) had decided to step down because the CEO of the company had received a take over offer and did not disclose it the board. The stock gapped higher on the open. I bought the April 25 calls for $1.00 based on the idea that more news might hit the tape including a potential take over price.(around 9:45 est on chart) The stock based for most of the morning until the headline hit a popular audio news service.(around 11:45 est on chart below) Right after that news hit the volatility in the april 25 calls exploded. I had the perfect opportunity to ring the register in my position. Note on the chart that the stock price did not move that much however the volatility in the options exploded. I had to decide how to handle the trade. I sold some of the calls at $1.75 and then I sold the April 30 calls for .70. This changed the position from a long call position to a long vertical spread. I am now long an April 25 30 call spread for free. I can now sit in the position for a couple weeks with no downside risk. If there is a follow up news story that causes the stock to go up I will profit nicely.