i have been playing bios for years- i cannot think of another time when a stock, on approval, dropped so far and so fast in a 24 hour period- can you ??( please give examples)
Absolutely.. the $7.50 straddle was talked about on CNBC yesterday. That's really huge.. but am not sure if it is set up for April 17th or for today's Ad Comm.. I'm guessing the 17th. But if these options are an indication, traders are anticipating at LEAST 50% up or downside on news.
Bloomberg has predicted that VVUS could double three times: 10 to 20 (done), 20 to 40, and then 40 to 80 if a takeover happens.
That's very optimistic, but I like listening to Bloomberg as a cautious guild.
AFFY is really getting beaten up here. Have to admit it really scared me, but in an educational way. I have been over-confident with VVUS and before their Ad Comm in February, had bought calls that were $3 over strike and did extremely well with them.
Doing the same here with AFFY taught me humility and caution. They are, as things stand now, pretty well worthless.
I'm really trying to set up a strategy that doesn't involve direct hedging.
As I'm writing this, VVUS is flying between 20 and 20.50. Am listening to the Cardio Ad Comm as I type and there is nothing happening there to cause it. Strictly playing going on.
I'd like to sell half my shares (keep the options), and put in a low bid ready for the bear sweep. We need a Seeking Alpha or Adam F. article to get it rolling though. Hey, if we can't beat them, may as well use them!
AMRN has a drug that was allowed to bypass an FDA panel (news in Feb '12) and there have been no spikes until their patent announcement on March 6th. Their PDUFA is in July, check out their chart for a similar effect in July, or maybe they won't have one.
They sell at 11.15$
how can you say you have been trading bios for years and this surprises you??? more like when has another bio tank on approval the question should be when hasnt a bio tanked on approval...over 90 percent of bios are lower the weeks after approval than not..if you have really been trading bios for years and you didnt see this coming you are either a liar or stupid. i posted yesterday before approval that it was gonna tank .. you buy bios for the run up and sell them before approval..when i asked why anyone would be holding through approval with so much profit already and risk of losing it all on rejection and losing only less on approval was retarded. i suggested most pumpers who were claiming it was a good idea to hold through approval were just shorts because even the most novice biotech player knows you dont hold through approval.
I studied these charts very well. I think most of this is common sense but some folks who are new to this get stuck.
Let me try to explain briefly. I should probably put this up as a new post as well.
Most of the shares for these BioTech stocks are taken up by short term traders. When confidence is high that a stock will get approved, the longs are ready to sell for quick profits at open. Naked shorts are ready to short quickly for small profits on a pullback. Lots of marketing is used like dilution etc in our case. All this simply brings down the stock. BUT here is the interesting part of these charts. UNLESS, there is something seriously wrong with the product or company financials (dilution etc), it will always bounce back to the higher levels. Just take a peek at the above for example CRIS or CORT. They won't fall in definitely but will find support at some point and then start moving up slowly. This is when investors jump in to this stock and traders move on to something else.
Personally, I am confident that AFFY will start moving up very shortly given company fundamentals look good to me ! I think AH is looking good and watch it move green tomorrow. If not tomorrow then definitely in a week or so. Good luck !
mich.. do you see VVUS going the same way? It also had a 100% upside after their AdComm vote of 20-2.
The thing unique about VVUS is that they have a product that holds huge potential in the obesity market (much bigger that AFFY's).
They also have an second drug (a shoe-in as well for ED) up for FDA approval 12 days after Qnexa. (so it's April 17th and then April 29th).
How would you play VVUS.. you sound quite experienced.
They time to buy AFFY was in Dec '11 after the 15-1 panel vote, as most people did, $5-8$ a share 20 million volume. That is where you get your double.
CRIS is a good example of an approved PDUFA getting stalled before running. It is inevitable that millions of shares will be sold after approval as day traders take quick profit. That is why shorts are drawn to these days, in general.
It's pretty easy to figure this out. The stock was fully valued at approvel. With a 15-1 FDA panel ok, it was fairly obvious to the market that it was going to be approved. Now the stock is in the "show me" stage with production and drug sales. It will probably settle somewhere in the $11-$12 area until a revenue pattern is established. Too many investors on this board thought that they have a lottery ticket. Experienced investors knew that there was no way it was going to pop too much due to the high expectation of approval.
DSCO.... but DSCO has non-blockbuster drug, and needed a lot of money to carry on.
I'm still on the sideline.... waiting to buy.
I want to say one thing.
As I wasn't deep into this thing (AFFY), reading at the FDA approval letter, it's said that the Co. will have to carry on a multi-years trial post-approval.
Maybe there's no buyout on the way.
In that prespective, they would need a lot of money (secondary off)? Many more than those coming from partner? (I guess there's a 50M$ upfront payment).
Otherwise I just can't explain this trend.