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In a post I wrote yesterday about where oil prices were heading next, I mentioned there were several media reports that suggested scientists were developing a vaccine from coronavirus. In particular Gilead Science has struck a partnership with Beijing's China-Japan Friendship Hospital to test out an antiviral drug called remdesivir in actual humans in Wuhan.

Gilead Sciences, Inc., a research-based biopharmaceutical company, discovers, develops, and commercializes medicines in the areas of unmet medical needs in the United States, Europe, and internationally.

Gilead reported their fourth quarter earnings on Tues which fell short of expectations.  Wall Street estimates. The company reported net income of $2.7 billion, compared with $3 million in the year-ago period. And their outook for the remainder of 2020 wasn’t any better. 

But Gilead was also in the news as it relates to the coronavirus. 

<blockquote>

Chinese researchers reportedly have applied for a local patent on an experimental Gilead drug that they believe could help fight the novel coronavirus outbreak - and also significantly bolster Gilead's bottom-line going forward.

The Wuhan Institute of Virology – based in the central Chinese city at the epicenter of the epidemic – has applied for a patent in China for the use of Remdesivir, an antiviral therapy used to treat infectious diseases including Ebola and SARS.

If granted, Gilead will need to get Chinese patent owners on board when it wants to sell the drug for treating the novel coronavirus infection outside China.

</blockquote>

<center><a href="https://www.thestreet.com/investing/gilead-falls-post-earnings-but-china-wants-to-patent-its-coronavirus-drug?puc=yahoo&cm_ven=YAHOO&yptr=yahoo">Source</a></center>

Remdesivir was developed as a treatment for Ebola. However, in the lab, it has demonstrated its ability to block the activity of a protein that helps coronaviruses make copies of themselves.  The first confirmed person in the United States with conornavirus was given Remdesivir.  On day one after taking the drug, the person started to get better. After day four, his fever was gone.  This is why China has interests.  The drug will be giving to 270 patients to see how they respond. 

Now I don’t know if there is any connection, but today the Smart Money bought a ton of call options on Gilead.  The Smart Money bought over  thousands of out of the money call options that expire in March,

![](https://cdn.steemitimages.com/DQmRvnjGdaLHkrHqu4Mqd5eNq6nwtJWMcewvLPcmaMGcgW5/image.png)

but then bought over 35,000 call options with a strike price at $80.

![](https://cdn.steemitimages.com/DQmTwcmBYdkCvMJWBeV5y83uewrmbupz3xvdHyPnfxNF5Cx/image.png)

So I had to jump in, but with caution because on the monthly chart, price has been in a range for about 18 months. 

![](https://cdn.steemitimages.com/DQmRJPb9B6ERpgHjJWJGUABiJv4UycQRnC9oLNzdbXaQriP/image.png)

But I just had to jump in, so I did buy one contract at the $80 strike price that expires in April.  If price reaches $80 before mid April this could be a 3X bagger.  

![](https://cdn.steemitimages.com/DQmeErVqzdDyiqPFF5sLnK9J61aRoTj5o32UPYH1mPUa7X2/image.png)

But I decided to finance the call options with a credit spread.  So as long as price stays above $67.50 before expiration, this will be a free trade. 

![](https://cdn.steemitimages.com/DQmScRaaVofa7pFry848qxvGBRTvVzwaFLXBaTbsDG6w3uM/image.png)

With all the bullishness in the options today, I can't see how price will remain stagnant or even go down.   However, nothing is ever guarantee in trading, so we shall see. 


 This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

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