BIIB Trade on Nov 4, 2020 14:39 from Marius: Tradervue User Stock Trades.

Markets rallying after elections day for the 3rd day. Notable strength in the reversal from last months weakness. VIX also decreasing notably. Still no decision on a chosen president but house and senate more probable it will be divided which is historically well for markets. Last time that took place was during Clinton presidency and SPY gained 278% in 8 years.

Lots of movement broadly. XBI with relative strength and breaking to ATH's. BIIB's drug "Aducanumab" received a FDA briefing showing the company had evidence of effectiveness to support approval for Alzheimers. There is also an important meeting at the end of the week to support in FDA approval.

Technical and intraday fundamentals had this stock show up on my scanner. BIIB has been trading in a 7 year range and today's volume accompanying the news is notable to merit a multi year range breakout. The technical implication of the move on HTF is around 200 points on the longer-term timeframe to the upside if it does confirm. Zooming in, it looks like weekly chop due to the range.

Fundamentally I'm not educated in this area and can't foresee the type of implications it can provide. Although this is an important disease that does have a wide population reach in elderly patients and can be seen as a critical treatment to life saving.

Options positioning wise there were notable call options that were placed at higher strikes with a trader positioned at 2.5M in the AM session when news broke. Some large position trading here and can be institutional related.

There were also 3 analyst upgrades today with targets at 450 and 390.

Although my position is cautiously positioned there seems to be a higher weight of bullish info and many traders positioned in the same direction. I've had experience in the past where these types of trades in the area can change dramatically. However I'm not stepping in front of the momentum as I'm trading with current momentum. The FDA has not officially approved the drug. I will be closing out the position before Friday if possible vs. the original plan through the end of the week due to more research and mid-review of the trade.

Intraday Fundamentals

RVOL 8.229
AVOL 1.773
ATR 12.50
Short Float 2%
Inst Own 90.60%
Shs Float 152.90M
Market Cap 53.29B

Options Statistics

SI 2.427
IV 68.82%
IVP 59%
P/C Ratio 0.641
VWAP 338.01

Seeing the higher call volume for the day and placing this variable in line with the large call buying orders mentioned earlier. MMM is +/- 40.323 from 355.63 which is about a 3 ATR move.

Options Position Metrics

The spread was wide here and OI was not as high probably due to my far OTM strike and trading nature of this stock with current developments. I entered on limited time and forced the entry which gave me an unfavorable price but still rewarding considering the volatility and movements. Keeping in mind if scaling to professional and even larger size, this is not acceptable. This trades current position size is 10 contracts with a notional value of 220k.

OI 317
Vol 153
Delta -.01
Theta -.28
Vega .01
Gamma .00

Tape Reading

Didn't have the level 2 up this time as there wasn't a level or inflection I was trying to analyze during the trade. Noting the larger call buys in the AM session. Something similar I remember seeing during NKLA's news trade with GM although entirely different area and type of stock. Proceeding the next 2 days with more caution. Keeping in mind the large institutional ownership and put buying in the 200's.

Technical Analysis

As mentioned prior this is setting up to be a potential HTF monthly range breakout on pending supporting fundamentals + a strong market tailwind. Still in the range and anticipating follow through if buyers step up and markets continue momentum. If there is notable selling then I may be thinking institutions not holding and possibly selling positions. Will also have to pay attention to hedging activity with options.

Trade Review

Trade closed out as planned before Friday when the conference was going to take place. Had offers set to take 60% profit overnight and trades were scaled out automatically with spreads tightening towards end of day. This enabled me to take risk off and apply capital to possible new trade ideas that where better R/R would be accomplished. This trade made 1R while still scalping. A new scalp trade was placed on an earnings trade breakout.