Intra-Cellular Therapies (“ITCI”) Stock Soars While Key Clinical Data Not Presented to Shareholders Looks Highly Disappointing

(July 15th, 2015) Biotech stocks have been on fire. And for good reason as numerous life-saving discoveries have come out of small, previously-unknown firms, making their owners rich many times over. But beneath the surface, a number of troubling drug development companies have caught the attention of investors with clinical data that’s dubious at best. With seemingly endless amounts of optimism, these biotech stocks have ridden the wave of investor enthusiam even when the data doesn’t look as promising as the market caps seem to indicate.

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All You Ever Wanted to Know About Retrophin But Were Afraid to Ask

(June 2nd, 2014) Humans, like atoms, abhor unsteady states of existence. Just like electron transport gravitates towards a steady-state, people gravitate towards peaceful lands and away from battleground areas. Read more

Know What to Buy When Putin Comes Knocking

So Putin rolls a bunch of tanks up to the Ukrainian border and the market slides a percent or so. In any other market that would be considered a yawn. But here in the good ‘ol US of A, where the average active investor can barely remember the dog days of ’08, few traders seem to have the skill set necessary to maneuver in a down market. Having done this for 20+ years, I thought it would be helpful to share my trading tips for when war comes knocking.
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QuickNote 6/18/14 – NQ Option Expiration

A quick thought on NQ Mobile (NYSE: NQ) : plenty of funds are betting that the auditors resign – and fast. Looking at the June 21 options – they expire in 3 days – there are 53,000 June 6 puts outstanding. There are also 24,000 of the 7 puts; that’s a total of approx. 77,000 (representing 7.7 million shares).

On the call side, there are  14,000 8 & 9 calls, plus 12,000 10 calls. You don’t need to know the greeks to see that there is a large bias to the short side.

As Friday expiration gets closer, those market makers who have hedged out these contracts have to close out the positions. What that means is that there is a natural net buyer given the tilt towards the puts – provided of course that there is no bad news to come out in the next three days.

To me, taking the other side is a great bet to make. I am a buyer of common stock right here and will sell it over time into Friday afternoon. In other words, I’m a renter of the stock and will sell it to the natural buyers when they come to market.

No guarantee here. The owners of these puts believe something bad happens this week. I think the odds that we hear something negative about the ongoing audit in under 72 hours is remote. I’ve seen these risk/reward setups dozens of times and I’m fixing the odds at 70% that the trade pays off.

” Concentration is my motto – first honesty, then industry, then concentration. ” Andrew Carnegie