So I step out for 15 minutes to get something from the store for my kids and come back to find out I have over $3k in losses in my OPTR shares and options. At first I thought they got a CRL, but then after seeing the news of approval I was just plain shocked. What was even more strange is that both my call and protective put options were down, that just didn't make any sense at all!
So now that the dust has settled it is pretty evident what has happened here today. First of all, there was no trade halt before the news came out. My guess is that management got the response from the FDA later then they had hoped and really wanted to get the news out before the market closed. I believe this proved to be a very bad idea as it allowed for a bear raid to take place before anyone could even figure out what was going on. You have to figure how many investors out there were just like me and didn't learn of the approval news until after the stock lost well over $1 per share! They would have been better off halting trading until Tuesday.
Also, the fact that the initial news releases had no mention of the labeling is what I believe made a lot of traders to suspect that the label itself was unfavorable. So between the sudden bear raid, investors unsure as to what the label would include, and the execution of a cascade of stop losses is what really happened. That is more evident now since the market has had time to digest the news as well as additional reports of a favorable label, thus causing the stock price to recover.
I must admit I was pretty tempted to cut my losses in the midst of the craziness, however the only move I made was to take advantage of the plunge in $15 call options to load up more at a ridiculously discounted price.
So what now? I believe that before the day is over we will see the stock price recover to at least the opening price. Next week however will be quite interesting. As far as I understand it, a bear raid is the sudden increase in short trading in an attempt to drive down the stock price. I really don't believe that the amount of shorting that occurred to cause the stock to drop was then completely covered. I think that all that was really accomplished overall was an increase in a short percentage. I think that next weeks conference call will further boost the price, and a massive short squeeze will ensue. Those involved in this illegal bear raid stand to lose a fortune in the coming weeks if I understand the entire concept completely.
GLTA, next week should really be exciting. Looking forward to a nice BBQ on Monday! God Bless our Brave Troops.
didn't read all of the the responses, so this might've been said already. the options dropped because the implied volatility drops after a major catalyst passes. not so sure the $15 calls were such a good idea. i got a few cheap 12.50 ones after the big drop. should be able to double my money if/when the stock hits $14.50
Due, in that middle of the craziness and i was too scared to lose my shirt and
I had 9000 shares bought at 14.2 and they were once trading at 12.3. And i got panic kicked and sold 5000 at 12.4 and i lost around 16k and i never would realize the biotech market would volatile like tgis really, i will never invest in these area any more
Hang in there with what you have left...you could make that money back this week or next. If the price goes below 12.40 consider buying a portion of it back...don't think we'll get there again though. Like your chances to break even within a couple of weeks.
kratos, the same happened to me with KV-A a while back under slightly different circumstances. I lost about 14K before I could get out, but, like I said, it was slightly different circumstances. That's why it is imperative to know what stocks you buying and either have confidence in the product or not. I'm sure you would have felt a "little" different if the stock had continued falling, for example, if the labeling had been different. As you may realized, every stock is different and will have different reasons for dropping (or not). AMRN has a product that is essentially ultrapurified fish oil and when the pps dropped, it didn't faze those of us familiar with the product because we knew it would eventually be worth far more and therefore just smiled and bought more. Same with this stock. A new antibiotic for a widespread and serious bacteria will eventually be worth more as soon as the panic selling/buying subsides. YOU panicked--a quite normal reaction--and sold off and you will be slower to make that mistake the next time, although of course the next time it could be appropriate to sell. That's the game. IMO there's a chance it may drop again in the first few days of trading and you can get your money back or still make dough on what you have left; we'll you will certainly do that eventually, probably sooner than later. My unasked for advice: Have a plan before the BS starts and stick to it. Figure out what the pro's and con's are of selling at a particular pps, how much of a loss are you willing to take in unforeseen circumstances, and how much profit do you want to make to hedge against the pps rising to a high and then falling (temporarily). Fear/greed rule in the first hours or days, then the real value dominates. Sorry if I seem preachy but just wanted to let you know you're not alone and for others who haven't traded bio's before. More happens in bio's than any other category and you can learn more about trading in 3-6 months than years in anything else. I've been darn lucky and blessed to have very knowledgable and considerate people (on AMRN board) who posted and answered all my newbie question during the lulls between events. They helped my increase my dough 10 times in 10 months. Just trying to do a little payback because I'm still really a newbie, just been through a heck of a lot in a little time. GLTA
with the current unemployment rate, the military is the major employer that's hiring the young unemployed. nothing noble when the draft dodging politicians send our troops for unjust, perpetual kinetic action campaigns. and not see
the day for remembrance of service, rather another day for a bbq
Bear raids have been more of a norm close to biotech approvals. MNKD had one, SPPI, now this. It is far easier to manipulate the market when he trading volume is not as high as with these stocks.
Simply put, a sale of large stock order takes place close to the peak, this causes a rapid drop of prices and flushes out stop orders and those of faint heart. The covering takes place at significant lower prices and a quick easy profit for the raiders.
My estimate is that close to 2 million shares were sold in about 20 minutes towards the close
what happed was really redeculuse. however, i found it great chance to increase my postion so i bought more at 12.40 >>> i gess you will see 16$ next week they suppose to halt trading to give chance to the poeple to read and analyz the announcement.
"What was even more strange is that both my call and protective put options were down, that just didn't make any sense at all!"
This is what happens when a binary event (approval or disapproval/CRL) occurs. The premiums have been built up (puffed up) on BOTH sides of the stock price (Calls for approval, Puts for disapproval) as the decision nears. Then, when the decision is announced, the air is let out of the balloon, and the premiums for the Calls and Puts decrease. This is why you can be correct in calling the outcome (Approval), but still lose money if your Calls deflate to prices below what you paid for them. In essence, what you saw was the "uncertainty" premium being removed from the options. Now that you have certainty, they are priced less.
Earlier this morning, I recommended selling the Call 15's immediately after the announcement was made because of the declining premiums. Those could have been sold for anywhere between $0.65 to $0.95 for about 8-10 minutes after the announcement. And they are now worth $0.20. Doesn't mean they won't rise back up, but the one day gain is what I was after.
it was an obvious bear raid. Designed to primarily trigger peoples stop losses going into important news. They drove this down into the mid 12's, knocking all the stop orders, then when the shorting eased off, the thing rallied 50 cents. I usually cancel any stop orders 2-3 days before news date.