Author Topic: Stocks  (Read 1258315 times)

Offline ckmk47

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Re: Stocks
« Reply #1140 on: May 05, 2015, 12:48:18 PM »
these options have extremely large spreads.
Put in a bid you can live with and see if a seller bites.
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Offline Mordyk

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Re: Stocks
« Reply #1141 on: May 08, 2015, 09:50:31 AM »
VRTX is a drug company that's come out with a new cystic fibrosis drug that's under review by the FDA.
The announcement by the FDA on whether they will approve the drug or not is set for May 12.

If the drug is approved, the stock should jump.  This is a volatile stock.  In the last 3 months its gone from $110 to over $135, back to $115 and then back up over $135 again.  After hours yesterday, they reported a bigger loss than expected, so the stock price dropped.  It was already going down after rumors that it will be bought out were quashed.

Will be watching
report this morning that this drug may not be so useful, the stock went down 6%. the market opens, stock up 4%. lol ;)
#TYH

Offline Emkay

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Re: Stocks
« Reply #1142 on: May 11, 2015, 06:24:37 AM »
$200 bonus when opening a new tradeking account with minimum $3000 http://welcome.tradeking.com/200-cash/
HT:mightytravels

Offline Mordyk

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Re: Stocks
« Reply #1143 on: May 12, 2015, 10:47:00 AM »
VRTX is a drug company that's come out with a new cystic fibrosis drug that's under review by the FDA.
The announcement by the FDA on whether they will approve the drug or not is set for May 12.


 ::)      #patience
#TYH

Offline ckmk47

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Re: Stocks
« Reply #1144 on: May 12, 2015, 12:51:18 PM »
Yesterday the 'preliminary' report from the committee came out.  The FDA mostly follows their recommendations.  Their report was decidedly parve. 
I'm in, so I just have to wait out the day to see if I lose the whole pot or rake in the gold.
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Offline fc

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Re: Stocks
« Reply #1145 on: May 12, 2015, 12:56:30 PM »
Yesterday the 'preliminary' report from the committee came out.  The FDA mostly follows their recommendations.  Their report was decidedly parve. 
I'm in, so I just have to wait out the day to see if I lose the whole pot or rake in the gold.
::)      #patience


i wish the two of you and all shareholders lots of luck, i didnt have a good feeling after reading up about them. too much risk for not enough upside...
In general the pharma stocks are so dangerous ...

Offline Mordyk

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Re: Stocks
« Reply #1146 on: May 12, 2015, 12:58:07 PM »

i wish the two of you and all shareholders lots of luck, i didnt have a good feeling after reading up about them. too much risk for not enough upside...
In general the pharma stocks are so dangerous ...
i have very little money in this. but the risk is the possibility of the option going to zero yet the reward can be very great in this situation.
#TYH

Offline somefield

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Re: Stocks
« Reply #1147 on: May 12, 2015, 02:58:04 PM »

Offline fc

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Re: Stocks
« Reply #1148 on: May 12, 2015, 04:17:10 PM »
Ad Comm votes 12 - 1 in favor of approval for Vertex's Orkambi

The FDA's Pulmonary-Allergy Advisory Committee votes 12 - 1 supporting
 the regulatory approval of Vertex Pharmaceuticals' (VRTX) Orkambi (lumacaftor/ivacaftor)
 for the treatment of cystic fibrosis patients with the F508del mutation.


It voted 13 - 0 that the product is safe.

Offline Mordyk

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Re: Stocks
« Reply #1149 on: May 12, 2015, 04:19:23 PM »
now when does this stock reopen for trading? ;) :P
#TYH

Offline ckmk47

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Re: Stocks
« Reply #1150 on: May 12, 2015, 05:00:03 PM »
Tomorrow, first thing, there'll be lots of movement.
I don't remember for sure from the last time I pulled this, but I think in the first half hour the stock will soar.
I think I'll going to dump most of my calls around/ before 10 am.  I guess I'll see tomorrow what really happens.
It his $135 in after hour trading. I expect a big surge when the market opens.  Then people start 'profit taking' and coming to their senses, so the price falls a bit.  Sometimes later in the day there's a new surge, but I won't count on it.  Sell 9:45- 10:00 am.
« Last Edit: May 12, 2015, 05:18:16 PM by ckmk47 »
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Offline ckmk47

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Re: Stocks
« Reply #1151 on: May 12, 2015, 05:22:00 PM »

i wish the two of you and all shareholders lots of luck, i didnt have a good feeling after reading up about them. too much risk for not enough upside...
In general the pharma stocks are so dangerous ...
Just a note about my 'tip'.  This was not a recommendation for the stock per se.  It was a bet that the drug would be approved and the stock would pop. I said how I expect to take advantage of that temporary pop.  I don't expect to hold this stock.
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Offline ckmk47

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Re: Stocks
« Reply #1152 on: May 12, 2015, 07:44:59 PM »
Plan for the NEXT PLAY:


Tomorrow the stock will jump in price.  Over the next few weeks, it likely will return to it's pre-good news low/volatility.  So now we bet on it's price drifting downward. 
This new play is independent of the previous bet that it would go up.  That was dependent on the FDA decision (that went our way, B"H).  This one depends on human nature - the excitement wears off, the realization that not all patients will benefit from this drug and that profits are not yet here.


So we buy a 'put' when the stock is near it's high in the next few days - maybe even first thing in the morning. (Although it's hard to get a price/purchase when the stock is moving fast.)
I want to buy a put for Aug.  That give the stock 3 months to get low enough to give us a profit. But there are no Aug options listed yet.  They'll probably get listed after Fri's May options expiration.  I don't want to wait until Mon to do this, so I'll have to choose between July - might be too soon for the stock to get really low, and Oct - the price of the put will be higher because with options you're buying time.


Either way- don't keep the option until expiration!  Sell when you have a decent profit- whenever the stock has a dip.  It's a volatile stock- it will dip.
I'll probably get the Oct put.  I'm buying time, but if I sell it by July or Aug I'll be able to sell some of that time to the next guy.


[When we buy a put, we obligate someone else to buy the stock at the strike price of the put. 
So if a stock is $50.  And we buy a July 17 put for 50 and pay a premium of $3.
If on July 17, the stock is down to 45. We sell the stock (that we don't own) for 50.
50 - 3 = 47.  then we buy the stock for 45.  47 - 45 = $2 profit for each stock. x 100 stocks in each option = $200.
Of course, if the stock has a bad day, or even if it's down to 45 in the middle of June.  We sell the put for more than the $3 we bought it at. In fact, the majority of options don't last all the way to expiration.]
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Offline ckmk47

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Re: Stocks
« Reply #1153 on: May 13, 2015, 08:22:04 AM »
On 2nd thought!!


The final decision of the FDA on this drug is going to be in July.  The stock may stay up and not drift down enouhg before then.
I'm rethinking buying a put yet.  I certainly won't put a lot of money into it.
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Offline yos9694

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Re: Stocks
« Reply #1154 on: May 14, 2015, 04:34:11 PM »
Just curious, why are you playing this through options? Why not take a position in the stock instead of paying the additional transaction fees and costs/risks of a derivative? For example, in your first post you quoted the stock at ~124.2 and the option k=125 at ~5.5 for a break even above 130. The stock did in fact open above 130 the other day, but quickly retreated below your BE point. So even if you sold immediately at open your margin was very thin. But had you bought the stock outright at 124.2 you could have profited 5.5 or more at the open.

I'll give 2 strawman reasons for using options as an investment instead of as a hedge: 1) For leverage, 2) For downside protection. But leverage can be obtained at a much lower cost through margin, and downside protection can be obtained at a much lower cost through buying puts. For example, if you had bought shares at 124.2 plus puts k=120 for ~1 or 2, your downside risk would be no more than 4.2+2 but your breakeven would be at 126.2 - a full $4 less than in your strategy. And with such a short investment horizon, you could use margin to multiply that investment as much as you wanted.

Offline ADG

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Re: Stocks
« Reply #1155 on: May 14, 2015, 04:47:59 PM »
This sounds so cool... to bad i have know clue what ur talking about.... is there a 101 place to learn?

Offline ckmk47

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Re: Stocks
« Reply #1156 on: May 15, 2015, 07:04:10 PM »
The thought process on the stock was mostly sound.
The price points were off.  So it didn't work as planned.
My lesson for next time:  Don't have such a small window between the cause of the stock surge and the close of the option.   I lost most of my investment.  If I had bought June calls, I would have another month to wait for a higher stock price.  I guess I was too cheap to pay the extra premium - my loss!
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Offline ckmk47

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Re: Stocks
« Reply #1157 on: May 15, 2015, 07:17:19 PM »
 yos9694.  The reason to play this through options rather than owning the stock outright.
If I bought options at $7 a piece, then I can buy 5 options - controlling a total of 500 stocks - for $3500.
If I were to use $3500 to buy the stock, at $125 each, I can buy 28 individual stocks.
So if the price went up to 135, the gain would be $10 x 28 = $280
But 5 options with a gain of $3 a stock  (125 + 7) is 500 x 3 = $1500


I didn't think about using puts as a hedge.  It's probably sometimes a better strategy.
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Offline Mordyk

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Re: Stocks
« Reply #1158 on: May 16, 2015, 10:27:27 PM »
The thought process on the stock was mostly sound.
The price points were off.  So it didn't work as planned.
My lesson for next time:  Don't have such a small window between the cause of the stock surge and the close of the option.   I lost most of my investment.  If I had bought June calls, I would have another month to wait for a higher stock price.  I guess I was too cheap to pay the extra premium - my loss!
+1 although i only lost a small part since i bought at a lower price point than you, it would be worth to have a little later expiration. as you saw Fridays action would've helped the situation
#TYH

Offline yos9694

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Re: Stocks
« Reply #1159 on: May 16, 2015, 10:58:52 PM »
yos9694.  The reason to play this through options rather than owning the stock outright.
If I bought options at $7 a piece, then I can buy 5 options - controlling a total of 500 stocks - for $3500.
If I were to use $3500 to buy the stock, at $125 each, I can buy 28 individual stocks.
So if the price went up to 135, the gain would be $10 x 28 = $280
But 5 options with a gain of $3 a stock  (125 + 7) is 500 x 3 = $1500


I didn't think about using puts as a hedge.  It's probably sometimes a better strategy.

So for leverage. See above. If used properly, the same play using margin would be more profitable.