Strategy Research on Bio Speculation

[lazycatcat]

aa

 

[colonel]

ARNA is red hot in the last few days. Obviously, market expectation is in the share price equation, as shown by today's ONXX price action.

July put volume is much smaller than call volume. It is inconceivable that the bullish buyers don't consider hedging. A rationale behavior should be buying more puts with more bullish positioning. There are only two explanations:

1). These folks are not rational.
2). These folks are sure approval will come.

It is a myth how the second could be true given highly secretive and unpredictable nature of FDA decision. Maybe there are people out there experienced enough to know FDA though process and thus could know in advance the FDA ...

How do you trade the FDA decision?
I am thinking to buy some puts maybe. This is crazy.
Do not understand why the run-up before FDA decision.

 

[colonel]

This thread is just for academic research and tracking of market behavior. Quoted prices/positions are raw market data to support certain observations quantitatively. They are also used to test rational reasons against future market behaviors.

As to decision on capital allocation, be it speculation or investment, Buffett said one should look into a mirror and work with whom one sees to make the decision.

Fighting against Market is never a good idea. The fact that market goes crazy doesn't necessarily mean it will become sane soon. It can stay crazy longer than one can stay liquid.

For highly speculative event as FDA decision, it is never a good idea to stand in the way even if one is sure it is not a train. There is no 20/20 vision on FDA decision. Therefore, one may choose not to join the craziness, one shouldn't bet against it either.

Reading original works of Buffett a few times over is probably the only sensible way to figure out how to take advantage of the craziness, if one chooses to do at all.

You are right. Fighting the trend is never a good idea and I had many lessons of that in my trading.

Regarding the fda decision, I have heard 40% chance of approval, 30% chance of delay and 30% chance of rejection.

No trade is the best thing when you do not know what to do.
If I am willing to bet on the delay or rejection, I will take a tiny position.

 

[加京游子]

该收摊了--- 凭你这本事也想开门收徒，不值一笑！

你日夜诅咒lorcaserin被拒，ARNA狂跌！知道吗？我在FDA有亲戚 --- 负责批药那个老太婆是为情人 --- 并且知道ARNA药批后股票不狂涨，而是慢慢地涨！所以，我没买6/7月的期权而是卖！

此葡萄很甜很甜！眼红病会死人，知道不？坏心眼也会死人的！