SteveJo22: yoy are Romans buddy right? Musicalmindz: yup Musicalmindz: appreciate all the advice SteveJo22: Ok, so basically figure out how many shares you want for the runup. SteveJo22: divide by half. SteveJo22: then write that many puts. SteveJo22: If you dont mind me asking, how much $$ are you trading with? Musicalmindz: 30k in the account Musicalmindz: i try to keep positions under 6k Musicalmindz: so 6k for runup would be reasonable SteveJo22: nice Musicalmindz: 6k worth of shares, not 6k shares lol SteveJo22: sticking with the 20% rules Musicalmindz: yup Musicalmindz: so divide by half is $3000 or around 330 shares SteveJo22: ok, so for you Maybe write 3-5 contracts. Musicalmindz: i wrote 6 actually Musicalmindz: but will adjust SteveJo22: ok, thats a full position SteveJo22: but I think in this case its ok Musicalmindz: ah k SteveJo22: I think they expire worthless. Musicalmindz: even with a 2mo extension? SteveJo22: its not an extension. SteveJo22: the Fda will assign 2 or 6 month review Musicalmindz: err sorry, new review date, right SteveJo22: I think you get assigned if its 6 months. SteveJo22: but looking at the recent trading history, 8.50 - 8.60 is not too bad of an entry. Musicalmindz: ya definitely SteveJo22: and, on a 6 month review, we might be able to short the stock anywhere above cost basis to lock it in. SteveJo22: if you didnt want the shares. Musicalmindz: the cost basis of 8.50-8.60? SteveJo22: so lets say 6 month review, and Pozn starts selling off. SteveJo22: all of a sudden the $9 puts are 0.70 and the stock is 8.50+ Musicalmindz: right SteveJo22: we would take a loss on buying back the puts. SteveJo22: but we could just short the common stock SteveJo22: and let them be exercised. Musicalmindz: oh and then we wouldnt end up with the shares SteveJo22: get it? SteveJo22: right SteveJo22: maybe even a profit SteveJo22: if we are fast Musicalmindz: depending on when we decide to short Musicalmindz: right SteveJo22: you can just short at your cost basis Musicalmindz: and that will get you an even trade? SteveJo22: yes, as long as it closes Oe under $9 Musicalmindz: just short pozn at 8.55 (my cost basis) 800 shares (to cover my 8 puts) Musicalmindz: gotcha SteveJo22: short puts means you are obligated to buy, the short is covered by the exercise of the put. SteveJo22: little bit abstract at first, but important to understand the concept Musicalmindz: right makes sense, let me try and re-explain so i understand Musicalmindz: if you arent busy SteveJo22: sure Musicalmindz: we sold the initial puts because we think people think the stock will go up but we know the upcoming fda decision on the timeframe of the review may send the stock lower SteveJo22: low probablility of 6 month though Musicalmindz: we keep our premium if it stays above 9 which we think is likely it will get a 2mo review Musicalmindz: right Musicalmindz: but on the off change it gets decked with a no review or a 6mo review, we have the option to let the puts expire and get the shares at 8.50 for a runup Musicalmindz: or Musicalmindz: short the stock as soon as we see it tanking to cover the exercise of the put Musicalmindz: if we dont want the shares SteveJo22: yea, you get it. Musicalmindz: so, last question SteveJo22: K Musicalmindz: this part, "we would take a loss on buying back the puts." Musicalmindz: what do you mean buying back the puts Musicalmindz: like actually buying the $9 august puts Musicalmindz: basically take the 0.20 loss to negate the puts we sold? SteveJo22: yea, we are short the puts, it might cost more to buy back the option. so just short the shares. Musicalmindz: so lets say this goes sour and we cant short for some reason, or dont get it in time, we can just buy the puts back and take the loss there SteveJo22: yes SteveJo22: you can do that SteveJo22: i would take the shares rather than take the loss though Musicalmindz: ya definitely, just trying to make sure i understand my options SteveJo22: maybe I will write this trade up as an article. SteveJo22: might help people out Musicalmindz: im sure people would appreciate that, it seems like an interesting one Musicalmindz: if we short the shares, do we have to wait till expiration for that to cover the put? SteveJo22: yes SteveJo22: but it will be close to Oe Musicalmindz: when we decide to short? SteveJo22: we should hear by ~july 14 Musicalmindz: right, so a month away Musicalmindz: (from then, till expiration) SteveJo22: we should hear if its 2 months or 6 months about a week before July Oe Musicalmindz: hmm Musicalmindz: but we sold the august puts Musicalmindz: if we find out ~ july 14 about the fda decision Musicalmindz: then dont we have to short at that point and sit on it till august expiration? SteveJo22: yup you are right SteveJo22: ya, short on the news, let it rundown, then cover the short shares. SteveJo22: once it stabalizes Musicalmindz: ahhhh ok cool so we short quickly and then sit till oE Musicalmindz: got it Musicalmindz: sweet, well i kinda understood before but now i definitely have a better grasp SteveJo22: awesome. SteveJo22: are you still writing web crawlers? SteveJo22: have an idea for you Musicalmindz: i am SteveJo22: nice SteveJo22: do you follow this guy? https://twitter.com/tradehawk Musicalmindz: ive got one that crawls twitter for posts by people i care about who post in stocks im in Musicalmindz: i dont Musicalmindz: but ive got follows setup on you, the BRU guys, shane blackmon, sheff, etc Musicalmindz: sadly sheff doesnt post about trades on his ihub anymore, he must have found out what im doing hah SteveJo22: so Tradehawk has soem way of getting Fda news like Orphan designation and fast track right when it comes out Musicalmindz: reaaaaally Musicalmindz: want me to monitor him? SteveJo22: I was thinking he must have a crawler like what you write Musicalmindz: ah, very very likely SteveJo22: the reason I know is that he sometimes sends the link to Mark asking what it means SteveJo22: this is before it goes on twitter, or widely spread SteveJo22: He had the Mnkd label before anyone and sent it to Mark, who shared it with me. Musicalmindz: hah interesting SteveJo22: That kind of stuff is Huge Musicalmindz: so he may not know what it means Musicalmindz: but can get it quickly SteveJo22: ya, he is just a trader Musicalmindz: gotcha SteveJo22: he dosent know what to look for SteveJo22: we do SteveJo22: imagine getting that Mnkd label a few minutes before the rest of the market and there was some kind of huge limitation in there. SteveJo22: We would be rich. Musicalmindz: i mean, even if its just what we heard this time SteveJo22: also, things like Orphan drug status and fast track designation can pop a stock 5-10% or more. Musicalmindz: you'd just be earlier on all your shorts and such SteveJo22: even a few seconds can mean thousands of $$$ SteveJo22: like when Af releases a hit piece article SteveJo22: a few seconds is huge SteveJo22: or sheff/mark buy Musicalmindz: ya, my twitter scraper helps me stay on top of BRU moves, thats for sure Musicalmindz: i can clearly see myself ahead of just about anyone trading against mike Musicalmindz: mark is harder, but similar Musicalmindz: so who would be the highest value target SteveJo22: http://www.fda.gov/newsevents/newsroom/pressann...efault.htm SteveJo22: maybe he just signed up for email alerts? Musicalmindz: link broken Musicalmindz: ok figured it out Musicalmindz: i mean email alerts seems way too simple Musicalmindz: that wouldnt get it to him any faster than anyone else gets it Musicalmindz: we could scrape that site Musicalmindz: they probably post to the site before they send out the email blast Musicalmindz: and im sure 10000+ are signed up for that email Musicalmindz: no guarantee when you will get it or what order they send it in SteveJo22: right, if they post to the site, then send out the email a minute two later SteveJo22: a scraper would be a huge advantage Musicalmindz: well, i can take a stab at that SteveJo22: I think its worth a shot, if its easy for you Musicalmindz: it should be dead simple Musicalmindz: now that ive got the framework in place SteveJo22: im guessing you already have the program written and you just need to make minor tweaks Musicalmindz: ya basically Musicalmindz: only problem is if the FDA does anything to thwart people doing this Musicalmindz: then it can get tricky Musicalmindz: but we'll see i guess SteveJo22: I doubt they care. SteveJo22: im sure its way easier than Amzn Musicalmindz: it is Musicalmindz: god Musicalmindz: so much pain dealing with them trying to stop us lately haha Musicalmindz: ok well ill check in next week at some point, hopefully cna get it working before monday so we can see updates as they flow in