Cobos...
Take a step back and look at those losses and think hard about the mistakes. Here is my guess, by the way I lost money on all these as well but had paired the positions downs so loss was manageable.
$KBIO
$ARWR
$APPY
KBIO
- fact: 3 platform drugs in pipeline around their technology, first one failed, company announce 2nd would release data January.
- Entry point was probably the first mistake or simply unlucky. My guess is many traders entered in the low 1.80s to high 1.70's since it was range bound Nov/Dec. Sold off late december to 1.60's and started a run back to 1.90. that's when you get overly greedy!
-trader's who are not discipline did not exit at a small loss, ample time to do so early Jan.
- Company guided January, many who got caught, myself include got a bit greedy with JPM conference and XBI being very strong into conference.
-traders did not want to take the small loss thinking they had time to get to a 10+% gain, betting data would happen after JPM. myself included.
-$heff got out - he is a pro:) But I at least recognized they failed their first drug, this was no way going to be a high conviction + data trade. I reduced my position to less than 5% of account. All of the above is pretty basic and you should not have gone into such a binary event with that much on the table.
$ARWR
- Management in biotech are always a bit promotional
- ARWR was clearly riding some hype on twitter, but all the data was preclinical and it was a "dose" escalating study.
- HBV and RNA are extremely challenging histories, so pure speculation it works, no clinical data by any company support that RNA approach to HBV will work. RNA has mostly been hype with little clinical success due to delivery problems. RED FLAG risky space!
- Management did a poor job managing expectations but why own more than a 10% position, with no hard catalyst, no clinical data to date, risky space difficult disease?
- trading pattern set traders up for making the mistake. Folks on this board started taking positions in $14/$15 range, stock trade sideways and down to $13's. Most had a loss so they held through late breaker catalyst hope/hype.
Those that lost big $'s on KBIO and ARWR got caught both by not understanding clinical history of the pipeline and because most had a small loss in their position making them hold to close to news release. APPY same story, but I had a 13% gain Wednesday and was holding for 15% target. I saw $sheff exit, but was staying disciplined to my price target GTC order in place. My mistake was similar to those who lost on KBIO and ARWR, held too close to news release date. $sheff was thinking early Feb, but others like Mike at Biorunup were targeting late January.
Long winded answer but learn from the mistake and move on
1- position size?
2- how close you held to data release targets
3- stock level vs entry point? be careful when you have a small loss as you get close to #2 above. Easy to hold out for a "green vs red" trade
Good luck and I feel some of your pain, it's what you learn from that pain that ultimately counts in the long run.
-BioHunter
