Hat Trick Day

I had to wait until after the FDA panel voted today on HGSI’s drug to treat Lupus, but the after-hours trading made it three big winners on a truly lousy day.

Overall, NAV went up about 1%, which counts as a win in a market like today’s.

I had pointed out all three in a post last week.

Each position was complex, consisting of long or short stock and both long and short options.

As I said in that post, the IOC parabolic rise since the secondary seemed unsustainable, so I had a net short position on there.  FAZ finally got moving today in response to the potential for a domino bank problem in Europe.  Yesterday I rolled the November options in FAZ to December, and today’s increase in the price and the volatility helped the position quite a bit.  For HGSI, I was selling puts and calls (strangles) for November (just two days left) and had a long stock position with matched covered calls.

In other words, all three worked in the direction I thought they might, but in each one I gave up some upside in exchange for lowered risk.



One Response to Hat Trick Day

  1. hhill51 says:

    Spoke too soon? HGSI was trading in the high $27’s last night. Today it’s been slammed down as low as $23.52 in the pre-market. (It’s also traded as high as $29 this morning.) Market psychosis is the only force more powerful than market psychology. I’ve canceled my option closing orders that I had prepared for the opening.

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