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Stock-Age: Stocks, Options and Dividends oh my!
- Thread starter koam
- Start date
Ether_Snake
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If I was stock picking right now, I'd probably put some money in DIS and BA.
The burn shouldn't be as high now since PH3 is over, especially since Bill & Melinda Gates Foundation is funding the maternal RSV program.
I'm holding onto the slim chance they identify the problem that occurred in the trial and hopefully the vaccine itself isn't ineffective. Something seems wildly off that the vaccine could be so effective in PH2 and a complete dud in PH3.
Even if they prove a trial error, they can't afford another PH3 and they can't afford to dilute any further, so their only options are to either partner up or package themselves for a buyout, at a severe discount.
I'm going to start unwinding my position a little as this bounces back up and shorts start to cover, and hope for a miracle.
So...huge and expensive lesson learned on my part. Never hold into PH3 data on a speculative small-cap bio where this is their only drug. I'd do it for a big pharma, but never this again. Greed completely clouded my judgement. I could have sold out before results and still made a tidy profit even if I bought back in after a huge jump if they were positive.
Luckily I only lost a car, and not the house. =)
p.s. If they can identify what went wrong and it's not an efficacy problem afterall, then this could be another SRPT situation, but it will take another 2-3 years to play out.
Allergen just changed the game for small bio buyouts
http://ibankcoin.com/flyblog/2016/0...s-a-little-nash-drug-biotech-for-500-premium/
Imagine waking up and seeing a stock you shorted just got bought out for 600%. This is why I don't short.
http://ibankcoin.com/flyblog/2016/0...s-a-little-nash-drug-biotech-for-500-premium/
Imagine waking up and seeing a stock you shorted just got bought out for 600%. This is why I don't short.
Wish I heard of TBRA...Jesus...
ClosingADoor
Member
I dunno, it goes both ways. You could be long and a drug doesn't get approved and it plummets.
vpance
Member
Absolutely. Which is why you should always try to be hedged prior to binary events or avoid holding into them - doubly so if you don't trade on technicals.
But trying to hedge biotech stocks gets expensive because of option premium..
I hope you are right about Disney because I have been watching them deteriorate since December last year and I'm getting tired of it. I think they may have found the bottom finally but I've said that a few times in the past year.
I see MSTX can be added to the biotech funeral pyre. Seems like biotechs are boom or bust right now. Unless you are EXEL and go up like 10 to 20 cents a day.
Now if you are playing an etf like LABD I would agree since you only owe what you invest.
I agree in theory but you can only lose what you invest going long. You can lose way more than 100% if you are short.
Now if you are playing an etf like LABD I would agree since you only owe what you invest.
Unknown Soldier
Member
It's not clear where the DIS bottom is, because for all the success of Marvel and Star Wars the real money has always been from ESPN and there's no saving that business model at this point and everyone knows it.
I had some DIS sometime in 2015, lost around 10% on it over a few months as it drifted inevitably downwards even when The Force Awakens was exploding box office records worldwide, that's when I realized I could wait forever for DIS or I could buy something that was going up.
In practice this isn't actually the case. The idea that a stock can only go to zero but it can go up to infinity only holds in theory. Moves beyond 2 standard deviations are incredibly rare, although more common in this thread probably as it seems like risky biotechs are pretty popular in here. Also if the stock are sub $10, the relationship between 0 and infinity is much more skewed.
It all depends on what underlyings you are trading in.
Some really nice up and down action between the initial announcement and her talking. I got off a few winning scalps of nasdaq futures and 30 year bonds. Definitely getting short up here
ClosingADoor
Member
See if that positive NYSE can lift Europe a bit more tomorrow. Some of my stock can use it.
But kind of sad that a 0.25% hike has such a hold on the whole financial world.
But kind of sad that a 0.25% hike has such a hold on the whole financial world.
kicking myself now because when BABA was at 94 and DIS was also at 94, I thought, "boy you should just sell all of your DIS and buy BABA." I already had a position in BABA at that time (roughly half of my "fun" stock money - i.e. not retirement stuff) and was worried about putting all my eggs in one basket. feeling kind of sour about it now.
At least just set a stop. Don't sell yourself out early if you don't have to.
I already sold tho. Good luck to you
Now I can look at other shares like Well Fargo, Disney or CD Projekt Red.
thank you. you did good! my avg price is not so great as yours but I am feeling pretty happy today.
I'd do it only as a means of hedging or insuring your positions. Otherwise it's straight up gambling, unless you're interested in setting up straddles.
I've been thinking about it for some spec stocks...for example if a 7 dollar strike price is 40 cents and I buy 10 call options that is 1000 shares, so I can only lose up to 400 bucks is that right? Anything over 7.40 I profit I believe if I call in my option.
I wonder sometimes if it is better to play spec bios with call options instead of owning stock. That NVAX crash kind of scared me from doing spec stock holds anymore even though I made a tidy profit on the oversold bounce. Thankfully the stock is swing trading paradise.
I wonder sometimes if it is better to play spec bios with call options instead of owning stock. That NVAX crash kind of scared me from doing spec stock holds anymore even though I made a tidy profit on the oversold bounce. Thankfully the stock is swing trading paradise.
If I were to do it I'd practice first on the investopedia stock simulator.
tastytrade.com is the only way to trade options. dough.com has good tutorials. Watch them all, learn and make money.
edit: and i will answer any and all question you have on the subject if you want to learn.
The biggest problem with this is time decay, or in the options world referred to as Theta. When you buy an option its value decays over time. The more time left on the contract, the more it costs. When you buy options, you can only lose how much you put in, so buying 10 calls, you are correct the max loss is $400. But every day those options lose value, so even if the stock moves from 7 to 10 you may lose money depending on how slowly it moves.
An alternative would be selling a put option instead, and then time decay works in your favor.
And the first response most people have to selling options as an opening position is that they are afraid of unlimited risk, so the next step if that's a concern, is you can create a defined risk position by using a vertical spread. So if you sell the 7 strike puts and buy the 6 strike put, the max loss would be the $100 per contract minus whatever credit received from selling the spread. And max profit is the credit received. So Ideally you get about half the width of the spread. Now you have a 50/50 bet with defined risk and max profits.
vpance
Member
You guys seem to catch good prices on these biotech stocks, so if they ever run up into an event like NVAX did recently and you have a low cost, why not buy some puts? It'll likely be win/win since it's a binary outcome.
Eg.
Your cost is $3, price prior to report is $9. Buy $9 put for $3 (high price due to volatility).
Drops to $1, sell put for 8, profit $5.
Sell stock at $1, lose $2.
Net gain $3.
On the other hand if it goes to heaven on a positive report, well, who cares about losing that $3 put.
Eg. 2
Your cost was $3, sell prior to the report at $9, profit $6.
Buy the $12 call for $1.
Buy the $6 put for $1.
Drops to $1, close all options for $4 profit, net $10.
Total guess on those option prices, but I'm thinking they aren't too far off from what they were at that time.
Eg.
Your cost is $3, price prior to report is $9. Buy $9 put for $3 (high price due to volatility).
Drops to $1, sell put for 8, profit $5.
Sell stock at $1, lose $2.
Net gain $3.
On the other hand if it goes to heaven on a positive report, well, who cares about losing that $3 put.
Eg. 2
Your cost was $3, sell prior to the report at $9, profit $6.
Buy the $12 call for $1.
Buy the $6 put for $1.
Drops to $1, close all options for $4 profit, net $10.
Total guess on those option prices, but I'm thinking they aren't too far off from what they were at that time.
The logic is sound, but it falls apart on the prices, as you mention you are just using made up prices. The IV (implied volatlity) in NVAX is 129% right now in the front month of October. This means options are expensive to buy. Also, IV is not static. In your example, you might buy a put for $3 and if IV drops, even if the stock moves in your direction, IV can contract and make your option worth less.
Honestly, it's not worth trading options on stocks that trade under $10. Just trade the stocks themslves.
vpance
Member
Yeah it wasn't general advice for any situation, it was more about theoretical trades going into the event with a decent sized profit. Forgot to mention you'd be buying the options with the closest expiration just before the report date, so no worry of IV drop.
I think I mentioned it on here before, but I used to like running options arbitrage trades on high IV bio stocks that were about to report. Sometimes you'd see huge put call price disparity because short interest was through the roof, like $7 stocks with ATM puts worth $5 going into the report but near OTM calls worth like $1-2. As long as you had a nice broker that could get you shares to short you could put on risk free trades
Eg. Something like, short 1000 shares at $7, sell 10 $7 ATM put for $5, buy 10 $10 call for $1.
Alright, finally basically closed out of my NVAX position except for a paltry few hundred shares in case of some white knight scenario, but that's about it. Emotionally I need to detach myself from this, but at least I recovered a little bit of my losses.
This also forced me to massively scale back my other speculative plays as I'll never sit through a phase 3 trial data readout in a speculative stock.
100% greed on my part and my fault, so this is a lesson learned, but I won't let this deter me. Still sitting on a sizeable amount of cash (non-retirement) to invest, but I'm going to wait out the election, so in the mean time I'll be trading in my paper account to see what works and what doesn't.
This also forced me to massively scale back my other speculative plays as I'll never sit through a phase 3 trial data readout in a speculative stock.
100% greed on my part and my fault, so this is a lesson learned, but I won't let this deter me. Still sitting on a sizeable amount of cash (non-retirement) to invest, but I'm going to wait out the election, so in the mean time I'll be trading in my paper account to see what works and what doesn't.
Thanks for the options advice.
I look at my EXEL stock portfolio and think it can't go up every day but it keeps happening. Bought under 4 earlier in the year to over 15 now, feels like a correction is needed but maybe it isn't the case? Might be the nvidia of Biotech stocks. Have some major catalysts coming too and the CEO just exercised some options that he can't cash out on for at least one year. Plus it seems to be bouncing off its 20 day ma and keep going up.
Went back to SPHS last week too with a small position. Nothing major but when the stock dropped to 2.54 I decided to get back in. Now I can go with my original plan on staying long on the stock and we'll see where it goes.
I look at my EXEL stock portfolio and think it can't go up every day but it keeps happening. Bought under 4 earlier in the year to over 15 now, feels like a correction is needed but maybe it isn't the case? Might be the nvidia of Biotech stocks. Have some major catalysts coming too and the CEO just exercised some options that he can't cash out on for at least one year. Plus it seems to be bouncing off its 20 day ma and keep going up.
Went back to SPHS last week too with a small position. Nothing major but when the stock dropped to 2.54 I decided to get back in. Now I can go with my original plan on staying long on the stock and we'll see where it goes.
Finally a down day for EXEL funny how that happens like hours after I post. Thankfully wasn't greedy and have a 14.90 stop which got triggered.
Edit:. Glad I put that stop in massive short attack happening. As much as I love the stock that chart looked scary. Probably get back in after the dust settles but need to see where it settles first.
Edit:. Glad I put that stop in massive short attack happening. As much as I love the stock that chart looked scary. Probably get back in after the dust settles but need to see where it settles first.
Congrats man. That's a good investment.
Captain Smoker
Member
My First Solar stock finally gets some steam.
+16% in the last few days.
But I bought it right before it crashed 30%, so I'm still in the red. ^^
OPEC-deal should could increase the momentum for now.
+16% in the last few days.
But I bought it right before it crashed 30%, so I'm still in the red. ^^
OPEC-deal should could increase the momentum for now.
ClosingADoor
Member
Jeej, my oil ETF is in the green again. And my oil stock up 5%. Only 1% more. Should have gotten a bit more when it was down.
Cirekiller
Member
Jesus when will the NVDA train stop?!
ClosingADoor
Member
That jump on the Deutsche Bank news in Europe. Got a little finance stock in this morning when it went below my buy limit order. In the green again. Thanks, Germans.
Unknown Soldier
Member
NVDA still going up.
nothingstopsthistrain.gif
You guys want to make a killing, look at TSM.
I scored some after the post-offering drop to $6. Now back to $7. Feels good man.
nothingstopsthistrain.gif
You guys want to make a killing, look at TSM.
I scored some after the post-offering drop to $6. Now back to $7. Feels good man.
Yeah post offerings can be good times to buy. Picked some up just under 6 as well. I actually like to buy growth companies after an offering because you get a temporary discount and the price typically goes back up.
Probably isn't too late to buy AMD right now too unless something unexpected happens. Tech is hot and I expect it to stay that way in the 4th quarter.
Id probably pick nvidia over AMD but I think they'll both be up in Q4. I have some of both. I have some SWKS too, now I need them to get buyout rumors happening like NXPI.
Yeah I still like the company....have a phase 2 update coming soon for another big drug of theirs. I think they are presenting data on Oct 10....if data is good probably be enough for me to get back in. With good data stock could really run, 13 to 15 bucks is nothing compared to where it might go.
Edit: I'm liking that TSM suggestion. Looks like they are just getting started on their run. Going to pick some shares up on monday.
Probably isn't too late to buy AMD right now too unless something unexpected happens. Tech is hot and I expect it to stay that way in the 4th quarter.
Id probably pick nvidia over AMD but I think they'll both be up in Q4. I have some of both. I have some SWKS too, now I need them to get buyout rumors happening like NXPI.
Yeah I still like the company....have a phase 2 update coming soon for another big drug of theirs. I think they are presenting data on Oct 10....if data is good probably be enough for me to get back in. With good data stock could really run, 13 to 15 bucks is nothing compared to where it might go.
Edit: I'm liking that TSM suggestion. Looks like they are just getting started on their run. Going to pick some shares up on monday.
Cirekiller
Member
Any PT for TSM there?
Unknown Soldier
Member
Good question. It's already almost doubled in the last year or so. There's no ceiling on the need for contract semiconductor manufacturing in the immediate future.