Biotechs are so brutal when their drugs fail to materialize. When was the last time you bought a company like NVAX where a failed drug wiped out over 80% equity. As a trader its tough enough, chasing biotech drug stocks seem like too much risk for reward.
NVAX down 84%, Some Option Buyers bought the $8s for $.20
- Thread starter JesseJamesFinn1
- Start date
Brutal is an understatement. I've tried that game before in my earlier trading days, looking for the "big score" which mostly end up as turds. TGAL, NGEN, XOMA are ones that come to mind. I also remember DNDN quite well (the stock R Morse mentioned above), certainly a wild ride on that one!
These are random shots given the FDA approvals/reviews. Best to stay away or play with options. I just looked at NVAX, quite interesting chart with "support" around a buck going back 10 years. Perhaps a random shot on an upside call if they don't file bankruptcy (which is often the case).
buying the $8 put options at .20 was reasonable. the question is how many people on this board sold them for .20to open and now will be pursuing a different career.
you can be sure that traders on the floor did not sell them to open unless they were completely hedged or were closing their existing long position.
you can be sure that traders on the floor did not sell them to open unless they were completely hedged or were closing their existing long position.
Last edited:
I've been trading SRPT. Currently trading around 30 with next week out of the money puts trading at a 350 vol. Crazy!
There is a silver lining for NVAX investors, they won't pay no mo' tax on Novavax.
By the way, thanks for the heads up on your post regarding NVAX. Yes, I called it a turd, but also mentioned there could be an options play and the charts looked interesting with the $1 mark as long term support.
I took a call spread (Jan 18's, 1.50 by 4). The vertical turd is up 40% already, and it's a leap so plenty of time. If it doubles, I'll sell 2/3rds and keep the rest on the house. Too bad it's a small position, I won't go large on turds given the history of them not panning out, but looks like this one just might provide a few bucks.
By the way, thanks for the heads up on your post regarding NVAX. Yes, I called it a turd, but also mentioned there could be an options play and the charts looked interesting with the $1 mark as long term support.
I took a call spread (Jan 18's, 1.50 by 4). The vertical turd is up 40% already, and it's a leap so plenty of time. If it doubles, I'll sell 2/3rds and keep the rest on the house. Too bad it's a small position, I won't go large on turds given the history of them not panning out, but looks like this one just might provide a few bucks.
Thank you Scalper Joe for being cool! I bought NVAX at $1.13 in After Hours the day the company announced the bad news because deep down I am still the MicroCap dude. Today I pounded SRPT and had a minor set back on a Chinese Parts maker. Glad I don't post my Growth Stocks I shared with my buddy Van because too many people are not cool.
Don't be so sure. There are a few fund PMs out there that make a living selling event risk, biotech included. While you do get carried out sometimes, most of the time you do all right - if you diversify in both temporal and asset dimensions, you certainly can do OK over time.