FAQ
*Investing in publicly traded biotech companies involves extreme risk and loss of full capital. My personal opinions and experiences are presented here and do not constitute investment advice*
Why I choose to invest in biotech stocks
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Certain investable biotech companies can produce dramatic stock price gains within a short time period.
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How I discover investable biotech companies
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Investable biotech companies must be able to produce extreme stock price movements at an anticipated catalyst date and offer put option contracts.
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How I determine catalyst timing
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Reviewing press releases pertaining to quarterly reports and pipeline updates catalyst timing may be narrowed to a half, quarter, or perhaps a month.
How I position into an investable biotech stock nearing an anticipated catalyst
Model a put-call options ratio or a put-share ratio in order to minimize downside risk while still allowing for upside price capture.
How I determine the anticipated catalyst effect on the biotech stock price
Among the considerations that predict stock price movements are: trial phase, indication, FIC/BIC,
stock float, short interest, pipeline, cash burn, cash balance, etc.
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How I close the trade
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Immediately after the catalyst event the trade is closed as one side of the trade should be reduced to near zero. The side of the trade producing value is also closed and captured save for perhaps a small portion still invested in deep value.
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