Reminder: Pharmboy is available to chat with Members, comments are found below each post.
Ahh, summer is almost here, and for many it means vacations, family, lots of sun and vacation proofing your virtual portfolio. While Phil's post on vacation proofings is a bit dated (maybe we can get him to update it!!), it still can give a premise on what needs to be done when going away for that needed time off and to spend quality time with family.
For now, though, I thought it would be good to review Pharmboy's 2011 virtual portfolio. There are so many different options on the PSW site with Opt using his 5d MA methods, Income Trader giving picks for iron condors and calendar credit spreads, and All About the Trends following the entry and exit points of trending stocks, there are a plethora of things to choose from for ones investing style. I focus on biotechs and big pharma, as they can be rewarding themselves, as well as cause us lots of angst (thanks DCTH) for our virtual portfolios. Below is the first half of the year and all the picks we have noted in chat, the SWW newsletter, as well as my write ups. Yes there are more, but these are the ones we highlighted.
Table 1. 2011 Picks Thus Far
As one can see, the biotech/pharma virtual portfolio is doing very well. We had several big winners including CEPH, GXDX, OPXA, IMGN and SGEN. We have also had a few losers with PLX and ISTA (although still active, I don't expect it to win) being hit. There are still many positions and stock picks that are in the virtual portfolio, and I would expect them to be fine by years end (e.g., CELG).
Being the midway point of the year, it would be wise to close out some more winners or see if any adjustments need to be made to ones that are on the loss column.
PDLI will need to be adjusted if the stock has not been called away already. I would roll to the November $6 calls and puts for a net credit of $1.20.
- For IRWD (Jan 14), I would start to reduce the exposure, as they are planning on announcing there successful NDA for Linaclotide. Getting $4 or better is a good ROI for a $1.80 investment.
- BIIB (Feb 6)January 2012 $60 puts can be bought back for 50c, as it is not worth the margin, and teh $60/70 BCS is $9.65. Why risk the loss, so I would sell it as well to collect the cash and go away for the summer happy!
- TSRX (Apr 15) has been a nice winner, and we have been in and out of it now twice. Keep 1/2 to 1/4 for a nice ride.
- OPTR June BCS along with the Ps sold is still there, but buying back the Ps at this point is probably a good idea for 20c or better. The spread is $1.20 (bought for $1), so watch it closely and try not to lose the $1 put into the pick.
- DEPO (May 13) lottery picks in June were the $9 C and $7.5 P sale for a net credit of $0.10. On track and any push into next week, we should close it out for a gain.
- VICL (May 16) June $5 Ps are going to be put to us, so our net entry is now about $4.40. No put sale for now, but sell the Sept $5 Cs for $0.30 or better.
- SPPI (May 19) June $8 Ps will expire worthless. I am selling the Aug $10/8 strangle for $1 or better as I have the stock as well.
A few that we are down on are our initial SVNT January 14 pair trade and the March 6 DCTH pair trade.
- The SVNT play was the Januaruy 2013 $10/15 BCS, and sale of the $10 Ps for a total CREDIT of $0.50. Currently, SVNT trades at about $8 and the spread is about a $2 credit if initiated now (damn fine deal if one has the margin). There is a ton of time for this one, and if one wants, double down on the calls and wait to sell the $15 calls when SVNT goes on a good run.
- As for DCTH, the January 2012 $6/11 BCS is about $0.80, with the $6 Ps at $1.80. This was initiated at a $0.15 credit. I think we should buy back the $11 caller and wait to see if DCTH can go on a good run. Doubling down on the calls may be a good idea, but I don't want to put any more money in them until we get a glimpse of what is happening on the revenue side of things from the EU CE mark just gained. There is still time to make some adjustments.
All other stocks that we own are doing fine (CRIS, CERS, SVNT, PDLI, NWBO, etc), and as an FYI I try to initiate ALL the plays I can in my own virtual portfolio after I post them. That way I am right there with you in the trade, win or lose. I hope this summer is a good one for all!
