My thoughts:
- clinical stage biotech data reveals are a binary event, with a high percentage of fails. While I don't think there's much chance of AVXL revealing anything worse than mediocre data, market reaction is what counts to traders. Shorts could be playing routine small biotech odds.
- protection against calls. At this point the stock can only fall 7 pts and change. Calls could shoot up by 10x, who knows.
I think many have gotten rich playing short-the-biotech odds. Out of a dozen binary situations such as AVXL's (at present), there will be, what 8, 9, 10 short winners and just a few losers? If you're one of those players the killer is the AQXP or similar, and certainly calls can provide adequate protection. I, like most seem here on the board are in AVXL for the long-term potential. I'm really not that concerned with near-term market reaction as I am data quality with respect to future sales. GLTA