Date of Award


Document Type


Degree Name

Master of Science in Finance



First Advisor

James W. Boyd

Second Advisor

Edward L. Morris

Third Advisor

Roger Ellis


The purpose of this study is to determine the accuracy of price targets set by options traders for small cap biotech companies approaching a Food and Drug (FDA) event. The study also highlights whether or not an increase in open interest improves the accuracy of options traders target price estimates. The thesis for this paper states that the options estimates of future price movement are accurate predictors of the future price one day before the FDA event. This thesis studies small cap biotech stocks with an approaching FDA approval or advisory committee meeting for the time period of December 2007 to April 201 3. The conclusions are that the price targets are significantly greater than the realized price. and that open interest does not significantly improve the accuracy of these contracts.

Creative Commons License

Creative Commons Attribution-NonCommercial 4.0 International License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

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