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Karyopharm Therapeutics

4/24/2018

Karyopharm Therapeutics Inc. is a clinical-stage pharmaceutical company focused on discovery and development and subsequent commercialization of novel first-in-class drugs directed against nuclear transport and related targets for the treatment of cancer and other major diseases.

Karyopharm Therapeutics Inc., a clinical-stage pharmaceutical company, focuses on the discovery, development, and commercialization of drugs directed against nuclear transport and related targets for the treatment of cancer and other diseases. Its lead drug candidate is Selinexor(KPT-330), which is in Phase 2b clinical study in treatments of refractory multiple myeloma; Phase 1b/2 clinical study in combination with backbone treatments for multiple myeloma patients; Phase 2b clinical study in diffuse large B-cell lymphoma; Phase 3 clinical trial in combination with Velcade (bortezomib) and dexamethasone for multiple myeloma patients; and Phase 2/3 clinical study in liposarcoma. The company is also developing KPT-8602 that is in Phase 1/2 study for patients with relapsed/refractory multiple myeloma; KPT-9274, which is in Phase I clinical trial for patients with advanced solid malignancies or non-Hodgkin's lymphoma; KPT-335, which is in Phase I clinical trial for the treatment of viral indications; and KPT-350 that is in preclinical stage to treat neurological disorders, and inflammatory and autoimmune diseases. Karyopharm Therapeutics Inc. was founded in 2008 and is headquartered in Newton, Massachusetts.
(Summary) (Company) (Chart)

22 April 2018
Price $14.59
1yr Target $20.18
Analysts 11
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain %
Yield 0.00%
1yr Tot Return %

P/E ---
PEG ---
Beta 3.61

EPS (ttm) $-2.81
EPS next yr $-2.56
Forward P/E ---
EPS next 5yr ---
1yr Price Support ---

Market Cap $730.38 Mil
Revenues $1.60 Mil
Earnings $-129.00 Mil
Profit Margin ---

Quick Ratio 3.00
Current Ratio 3.00
Debt/Equity ---

1yr RevGR %
3yr RevGR %
5yr RevGR %

1yr EarnGR %
3yr EarnGR %
5yr EarnGR %

1yr DivGR %
3yr DivGR %
5yr DivGR %

ROA -75.30%
ROE -89.60%

Operations

The Company's scientific expertise is focused on understanding the regulation of intracellular communication between the nucleus and the cytoplasm. They've developing novel, small molecule Selective Inhibitor of Nuclear Export, or SINE, compounds that inhibit the nuclear export protein XPO1. These SINE compounds represent a new class of drug candidates with a novel mechanism of action that have the potential to treat a variety of diseases in areas of unmet medical need.

Their lead drug candidate, selinexor (KPT-330), is an XPO1 inhibitor being evaluated in multiple late stage clinical trials in patients with relapsed and/or refractory hematological and solid tumor malignancies. XPO1 mediates the export of over 220 different cargo proteins, including the vast majority of tumor suppressor proteins. Karyopharm believes that no currently approved or current clinical-stage experimental cancer drug candidates are selectively targeting the restoration and increase in the levels of multiple tumor suppressor proteins in the nucleus.
Other drug candidates in development include oral verdinexor (KPT-335), an anti-viral agent as well as a treatment for cancer in companion dogs, oral KPT-350, a treatment for neurological, inflammatory and autoimmune conditions, KPT-8602, a treatment for relapsed/refractory multiple myeloma and an oral dual PAK4/NAMPT inhibitor, KPT-9274, for the treatment of patients with advanced solid malignancies or non-Hodgkin’s lymphoma.

XPO1-inhibiting SINE compounds that the Company has discovered and developed to date, including selinexor, have the potential to provide a novel targeted therapy that enable tumor suppressor proteins to remain in the nucleus and promote apoptosis of cancer cells. The Company believes their SINE compounds have the potential to provide therapeutic benefit in a number of additional indications, including autoimmune and inflammatory diseases, wound healing, HIV and influenza.

In addition to the SINE compounds, the Company also investigates XPO1 cargo proteins and their role in the cell cycle and cell division. As part of this investigation, Karyopharm has identified several XPO1 cargo proteins whose inhibition leads to the selective death of cancer cells. One of the XPO1 cargo proteins is p21-activated kinase 4, or PAK4. PAK4 is a member of the PAK family of kinases that includes 6 proteins, PAK1-6. PAK4-6 belong to a growth-promoting sub-family. PAK4 is a signaling protein regulating numerous fundamental cellular processes, including intracellular transport, cellular division, cell shape and motility, cell survival, immune defense and the development of cancer. PAK4 interacts with many key signaling molecules involved in cancer such as beta-catenin, CDC42, Raf-1, BAD and myosin light chain. Based on this biology, the Company used their drug discovery and optimization expertise to identify small molecule modulators of PAK4. The PAK4 allosteric modulators have shown broad evidence of anti-cancer activity against hematological and solid tumor malignant cells while showing minimal toxicity to normal cells in vitro. In mouse and rat xenograft studies, the PAK4 inhibitors given orally have shown evidence of anti-cancer activity and tolerability.

Recently, Karyopharm identified an additional target for their clinical candidate KPT-9274 known as NAMPT (Nicotinamide phosphoribosyltransferase; also known as PBEF or Visfatin). NAMPT is a pleiotropic protein with intra- and extra-cellular functions as an enzyme, cytokine, growth factor, and hormone that can be found in complex with PAK4 in the cell. NAMPT is of interest as an oncology target because it catalyzes the rate-limiting step in one of the two intracellular salvage pathways that generate nicotinamide adenine dinucleotide, or NAD. NAD is a universal energy- and signal-carrying molecule involved in mitochondrial function, energy metabolism, calcium homeostasis, antioxidation, and paradoxically generation of oxidative stress, gene expression, immunological functions, aging, and cell death.

In addition, the Company is investigating a SINE compound for cancer in companion dogs, both as a surrogate model for human malignancies and as a potential treatment for cancers in dogs. It is widely known that canine lymphomas respond to chemotherapy similarly to their human counterpart (human NHL) and display a comparable genetic profile. Lymphomas are one of the most common tumors in pet dogs. Lymphoma in dogs is very aggressive and, without treatment, the tumors are often fatal within weeks. The majority of dog lymphomas are DLBCL and most of the others are T-cell lymphomas. Verdinexor has received a Minor Use / Minor Species, or MUMS, designation from the Center for Veterinary Medicine, or CVM, of the FDA for the treatment of lymphomas in canines.

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My Path Forward

I actually found this company researching options and reviewing stock charts. This one looked really interesting and the premiums were rather robust. That said, there's always a lot of risk involved in biotechnology stocks and even more so in those clinical stage companies without an approved product. So obviously, Karyopharm is a very risky investment.

I intend to start a postion in these shares and then immediately sell puts and options on the position. The purpose is to receive option income quickly to offset the price of the shares and hopefully get reimbursed as quickly as possible for the outlay of money for the position. Assuming I can bracket the movement correctly, I'll keep the premium income without loosing the shares. Additional income or wealth will come from the increase in the value of the shares over time and the risk is the possible reduction in the value of the shares faster than the inflow of income from the options.

This can be a very lucrative strategy over time but it can also be expensive if the shares decide to move against the trader. Therefore any investor making this type of investment should have an exit strategy in place at the time of entry.

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Options as a Strategy

4/18/2018

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Options are hardly ever the primary focus of investors as they begin their investing career. In fact, they’re totally ignored for the most part. Only later in their investing career do they realize that was a mistake. An error of innocence. A missed opportunity.

But as young investors become seasoned investors over time, they start to realize they’ve been leaving money on the table for years. They haven’t been maximizing their talent or their opportunities. For some, they discover cover call writing. At least initially they find themselves writing out of the money (OTM) covered calls. Some never mature past this strategy.

I first discovered this strategy in the 1980s when I found out that most covered call at the time were sold in the State of Florida. I thought that was odd but I soon discovered that the covered calls were being sold by retirees who had been sitting on large numbers of shares of companies. While many just enjoyed retirement living off dividends, others looked for ways to augment their income. And the answer they found was the sale of OTM covered calls. Most sales were far OTM because most retirees really didn’t want to lose their shares, they just wanted additional income. Selling covered calls performed that function almost flawlessly.

For others it only took a couple of downdrafts in the markets. Retirees became fearful that whatever wealth they had accumulated owning shares of companies could easily be threatened by a market pullback. And that directly threatened their security and way of life. They needed insurance in order to secure their lifestyle. And that’s when they discovered puts. Puts provided the security that the markets simply couldn’t. It was exactly what those seniors needed.

Very quickly a few of those investors discovered that a select combination of covered calls and puts could provide both income and protection. If you could figure out how to make more with the covered calls than was spent buying puts, you could both increase you income and sleep well at night too!

If that was the end of this story then all would be fine but found all sorts of combinations of calls, puts, and expiration dates. Books were written and software was written for program trading. It all got rather sophisticated and that took the edge away from traders and put it in the hands of brokerage houses. Options trading became more difficult as it became more complicated, and those who stayed with the basics tended to do better than the more sophisticated investors.

But options remained centered on the equity. It’s always been a second order effect of the underlying security and virtually no one thought any different. But with a little thought things could be turned around. Or rather inverted. Instead of thinking of options as additional income or insurance, think of the option first and the equity second.

It’s easy to do this with puts. The most conservative strategy of puts is to sell puts but have then secured with cash. It allows the investor to buy shares cheaper than he could or make money for waiting. Now think of equity as be the vehicle that secures calls. Just as we look for the best puts and secure them with money, we can now look for the best calls and secure them with stock. It puts the emphasis on the option rather than the stock.

The emphasis now focuses on the premium of the call option. The strategy now is to find the best premium and that usually happens with the equity is at the strike price. And since premium deteriorates the fastest near expiration, the shortest time to expiration becomes the best strike price.

The intent of this strategy is to emphasize cash over securities. Entering securities and options is only temporary. The main emphasis of this is to sell the best premium and cash out. Find stocks with an upward bias, sell just OTM options, and then get exercised back into cash. The advantage of this strategy is knowing the percentage return on investment when exercised. Finding options that return more that 10% in a month is pretty easy and most will be 3-5% OTM. If exercised, that’s just a boost to the option money.

This strategy keeps the investor in money as long as possible and as often as possible. It is this being in cash that provides an additional layer of financial security. Cash doesn’t go down in value (except for loss due to inflation) like a pullback in the markets. Getting in and understanding or estimating your expected return up front and your length of involvement provides a level of confidence not found in a strategy of buy and hold (often referred to as pay and pray).

If you’ve always thought of options as an additional supplemental strategy of investing, you should probably take the time to understand options as a strategy in and of itself. It might just be another tool in your tool box as you continue down that road toward financial freedom and security.

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Audentes Therapeutics

4/16/2018

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Audentes Therapeutics is a clinical stage biotechnology company working in the area of development and commercialization of innovative gene therapy treatments for people with serious rare diseases. They are focused, experienced and passionate about the goal of improving the lives of patients. They currently have four products in development, AT132 for the treatment of X-Linked Myotubular Myopathy (XLMTM), AT342 for the treatment of Crigler-Najjar Syndrome, AT307 for the treatment of CASQ2-related Catecholaminergic Polymorphic Ventricular Tachycardia (CPVT), and AT982 for the treatment of Pompe disease. None of these are commercial products yet.

Audentes Therapeutics, Inc., a biotechnology company, focuses on developing and commercializing gene therapy products for patients suffering from diseases caused by single gene defects in the United States. The company is developing four products, including AT132 for the treatment of X-linked myotubular myopathy; AT342 for the treatment of crigler-najjar syndrome type 1; AT307 for the treatment of the CASQ2 subtype of catecholaminergic polymorphic ventricular tachycardia; and AT982 for the treatment of pompe disease. Audentes Therapeutics, Inc. has a collaboration with the University of Pennsylvania to develop AT342, an AAV gene therapy for Crigler-Najjar Syndrome, an inherited, metabolic liver disease. The company was founded in 2012 and is based in San Francisco, California.
(Summary (Company) (Chart)

15 April 2018
Price $37.88
1yr Target $41.60
Analysts 10
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain 9.82%
Yield 0.00%
1yr Tot Return 9,82%

P/E ---
PEG ---
Beta ---

EPS (ttm) $-2.75
EPS next yr $-3.46
Forward P/E ---
EPS next 5yr 4.40%
1yr Price Support ---

Market Cap $1.38 Bil
Revenues ---
Earnings $-70.70 Mil
Profit Margin ---

Quick Ratio 7.70
Current Ratio 7.70
Debt/Equity 0.02

1yr RevGR ---
3yr RevGR ---
5yr RevGR ---

1yr EarnGR ---
3yr EarnGR ---
5yr EarnGR ---

1yr DivGR ---
3yr DivGR ---
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ROA -52.40%
ROE -60.50%

Operations

Audentes Therapeutics is a clinical stage biotechnology company focused on developing and commercializing gene therapy products for patients living with serious, life-threatening rare diseases caused by single gene defects. The Company believes that gene therapy has powerful potential to treat these diseases through the delivery of a functional copy of the gene to those affected cells, resulting in the production of the normal protein.

They have a compelling portfolio of product candidates, including AT132 for the treatment of X-Linked Myotubular Myopathy, or XLMTM, AT342 for the treatment of Crigler-Najjar Syndrome, or Crigler-Najjar, AT982 for the treatment of Pompe disease and AT307 for the treatment of the CASQ2 subtype of Catecholaminergic Polymorphic Ventricular Tachycardia, or CASQ2-CPVT. They have initiated Phase 1/2 clinical studies in their AT132 and AT342 programs, and plan to provide interim data from these studies in the second quarter of 2018. They also plan to file an IND for AT307 to treat CASQ2-CPVT in the first quarter of 2018, and are conducting IND-enabling preclinical studies of AT982 for the treatment of Pompe disease, for which they intend to file an IND in mid-2018. The Company maintains full global rights to all their product candidates.

Audiences has developed a proprietary in-house cGMP manufacturing capability that provides them with a core strategic advantage, enabling superior control over development timelines, costs and intellectual property. Their manufacturing facility, located in South San Francisco, will support the Company's research, process development and manufacturing capabilities in accordance with current Good Manufacturing Practices, or cGMP, requirements.

The Company has established a comprehensive platform for the production of their adeno-associated virus vector, or AAV, product candidates and plan continued investment to further optimize their manufacturing capabilities to cost-effectively produce high-quality AAV vectors at both clinical and commercial scale.

The Company's vision is to be the global leader in AAV-based genetic medicine for rare diseases.  In pursuit of that goal, the Company is executing on their core strategic initiatives, which include the advancement of current product candidates, the continued development of proprietary in-house manufacturing capabilities, and the expansion of the pipeline.

The Company's mission is to bring innovative gene therapy products to patients living with serious, life-threatening rare diseases. They believe their product candidates have the potential to provide long-lasting benefits from a single administration.  Given the available clinical and regulatory pathways, the Company believes the rarity and severity of the diseases targeted will provide advantages for drug development, including the potential for expedited development and regulatory review, and market exclusivity.

Audiences focuses on the treatment of rare diseases caused by single gene, or monogenic, defects in DNA that can be effectively addressed using gene therapy.  Conventional approaches such as protein therapeutics attempt to replace the deficient protein, but they do not correct the underlying genetic defect causing the disease.  In addition, protein therapeutics often require frequent administration by injection or infusion and often result in sub-optimal safety and efficacy. Gene therapy is the ideal treatment for diseases caused by monogenic defects.

The Company's portfolio of product candidates employs the use of AAV, a small, non-pathogenic virus that is genetically engineered to function as a delivery vehicle, or vector, and is administered to a patient to introduce a healthy copy of a mutated gene to the body.  AAV gene therapy vectors are modified such that they will not cause an infection like a normal virus, but are capable of delivering therapeutic genes into patients’ cells.  Vectors derived from AAV have a well-established safety profile in humans and have been shown to effectively deliver genes to the liver, eye, muscle and brain.

Preclinical and clinical data demonstrate that AAV vectors are capable of providing durable efficacy with a favorable adverse event profile due at least in part to AAV’s low immunogenic potential.  AAV vectors can be described by the serotype, or strain, of the original virus isolate that was used to form the outer shell, or capsid, of the vector.

The Company's business model is to develop and commercialize a broad portfolio of gene therapy product candidates to treat rare diseases. They use a focused set of criteria to select product candidates that we believe have the best chance of success.  These criteria include:

serious, life-threatening rare diseases;
monogenic diseases with well-understood biology;
disease characteristics well-suited for treatment with AAV gene therapy technology;
high potential for meaningful clinical benefit;
compelling preclinical data;
clear measures for evaluation in clinical trials; and
opportunities for expedited development through established regulatory pathways.

Audiences has built a portfolio of gene therapy product candidates and they intend to further expand that portfolio over time. Set forth below is a table summarizing their current development programs.

AT132. XLMTM is characterized by extreme muscle weakness, respiratory failure and early death, with an estimated 50% mortality rate in the first 18 months of life. The disease is the result of mutations in the MTM1 gene that affect the production of myotubularin, an enzyme required for normal development and function of skeletal muscle. The incidence of XLMTM is estimated to be one in 50,000 male births. Currently, only supportive treatment options, such as ventilator use or a feeding tube, are available. Audiences is developing AT132, an AAV8 vector containing a functional copy of the MTM1 gene, for the treatment of XLMTM. AT132 may provide patients with significantly improved outcomes based on the ability of AAV8 to treat skeletal muscle. Preclinical study results in both canine and murine models of the disease demonstrated dramatic improvements in all outcomes, including histology, muscle strength, respiratory function and survival. The Company's goal is to achieve these same benefits in XLMTM patients following a single intravenous administration of AT132.

AT342. Crigler-Najjar is a rare, congenital autosomal recessive monogenic disease characterized by severely high levels of bilirubin in the blood, which presents a significant risk of irreversible neurological damage and death. The average life expectancy is reported as being 30 years of age with phototherapy. Crigler- Najjar is estimated to affect approximately one in 1,000,000 newborns. Infants with Crigler-Najjar develop severe jaundice shortly after birth resulting in rapid presentation and diagnosis. Crigler-Najjar is caused by mutations in the gene encoding the UGT1A1 (uridine-diphosphate (UDP)-glucuronosyltransferase (UGT) 1A1) enzyme resulting in an inability to convert unconjugated bilirubin to a water-soluble form that can be excreted from the body. Clinical diagnosis is confirmed via genetic testing of the UGT1A1 gene. The current standard of care for Crigler-Najjar is aggressive management of high bilirubin levels with persistent, daily phototherapy, usually for longer than 10 to 12 hours per day using intense fluorescent light focused on the bare skin, while the eyes are shielded. Phototherapy speeds bilirubin decomposition and excretion and lowers serum bilirubin, but wanes in effectiveness as children age due to thickening of the skin and reduction in surface area to body mass ratio. Data from our prospective natural history study LUSTRO demonstrate that persistent phototherapy only reduces bilirubin to levels just below those that are considered to be neurotoxic. In some cases, a liver transplant may be required for survival.

AT982. Pompe disease is a serious, progressive genetic disease characterized by severe muscle weakness, respiratory failure leading to ventilator dependence and, in infants, increased cardiac mass and heart failure. The incidence of Pompe disease is reported to be approximately one in 40,000 births. The infantile onset form of Pompe disease is often fatal due to cardio-respiratory failure within the first year of life. In the late onset form of Pompe, which typically manifests in the third or fourth decades of life, the disease is progressive and life-limiting with significant ventilator and wheelchair use. Both forms of Pompe disease are caused by mutations in the gene encoding the enzyme alpha-glucosidase, or GAA, which results in a deficiency of GAA protein and leads to the accumulation of glycogen in an intracellular organelle known as the lysosome. The only approved treatment for Pompe disease is enzyme replacement therapy, or ERT, which is a chronic treatment delivered in bi-weekly intravenous infusions. Despite the availability of ERT, significant medical need persists, which is primarily due to the immunogenicity of ERT and its inability to penetrate all of the key tissues affected by Pompe disease. Gene therapy may effectively address these limitations.

AT307. CASQ2-CPVT is a rare monogenic disease that is characterized by life-threatening arrhythmias that may lead to sudden cardiac death. There are currently only limited treatment options with variable efficacy for patients suffering from CPVT, including beta-blockers and a sodium channel blocker, flecainide. The autosomal recessive form of the disease is caused by mutations in the calsequestrin 2 gene, or CASQ2 gene, and is characterized by stress- induced heartbeat rhythm changes in an otherwise structurally normal heart. Literature estimates suggest that CPVT occurs in one in 10,000 people, with approximately 2% to 5% due to mutations in the CASQ2 gene. This equates to an approximate prevalence of 6,000 affected people in North America, Europe and other addressable markets. To confirm these numbers, we have recently initiated activities to identify CASQ2-CPVT patients and further characterize the disease burden and unmet medical need for patients living with CPVT. Despite treatment with anti-arrhythmia therapies, sympathectomy and implantable cardiac defibrillators, a significant portion of the patients remain symptomatic. We are developing AT307, an AAV8 vector containing a functional version of the CASQ2 gene. Preclinical data in murine models of the disease demonstrated an ability to prevent ventricular tachycardia through restoration of CASQ2 protein expression. We are advancing AT307 with the goal of providing a single administration of AT307 that results in a significant reduction in life-threatening arrhythmic events and a major improvement in quality of life.

My Strategy for Audentes Therapeutics

Investing in Audentes, like any other clinical stage biotechnology company, is an extremely risky idea. Most of these companies fail simply because of the difficulty of the science and the approval process. But this risk brings in a lot of investors willing to take a chance on the probability of a big payout if things work out. That's also reflected in the options market. My strategy has always been to pursue the big payoff but be aware of the risk, be nimble in my pursuits, and always have an exit strategy.

In this case, I will pursue the strategy of write-buy-write. I intend to accumulate these shares through the sale of cash secured puts. Once owned, I intend to write call options. The intent of these options is to get into the shares at a specified price that's less than the current price and then sell call options to reduce my costs. I think if done right this can be a lucrative transaction.

At the current price of $37.88, May 35 puts can be sold for around $5 allowing the seller to purchase these shares for a net price of $30 if exercised. The sale of May $40 calls is currently about $7. These are tremendous premiums and just demonstrate the risk involved in owning these shares.

This is a very risky trade and I don't suggest anyone should avail themselves of this opportunity, but for me there's potential over a very small timeframe to get a return on investment of around 15-20% and that's something I just can't pass up.

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A Weibo Swing Trade

4/10/2018

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Occasionally I run across a company that presents a lot of opportunities for my style of investing. Granted you won't find a dividend here but what you do find is a defined channel and the ability to sell weekly options. Obviously I wish these shares were priced in the $30s or $40s, but you often have to take what you can find in the markets. I think these shares are about to bounce off the lower channel line and head back higher toward the $140s.

So what's my strategy for these shares? The natural choice would be to swing trade between the channel lines but that would require volume and would be pretty expensive. A complementary strategy would be sell options in lieu of the swing trade. There's benefits and costs associated with both strategies are different and before investors decided which strategy to chose, they need to understand them both. It's this understanding that is the basis of an exit strategy.

The Swing Trade. This is the best choice. It's simple and it's easy. But it's also expensive. It doesn't take a lot of thinking and the stress level is somewhat lower. Simply buy as close to the lower channel and line and wait for the shares to rise up to the upper channel line. Since there's no time constraints, a trader simply has to sit back, monitor the situation, and wait for the shares to rise and put in a sell order near the upper channel line. Seems easy and it is, as long as everything goes well. The channel lines are the key. Especially the lower one. And that's why you have to monitor the trade. If the lower channel line doesn't hold, a quick decision needs to be made that sells the position until a trader can understand what's happening. Holding shares that are falling is never a good idea so the quicker the situation is recognized, the sooner this exit strategy is executed. If it later turns back higher investors can always re-enter the trade later.

The Option Trade. The key to this strategy, like most option strategies, is the advantage of leverage. The money to be made is mostly in the premium and the directions movement of the shares while the downside is time limit if the trade goes against the trader. There just needs to be better timing of the trade. With channel lines the obvious trade is selling puts when the price is sitting on the lower channel and selling calls when the price is nearing the upper channel. Similar to the swing trade, this strategy needs to be monitored closely when the price is near the channel lines but it also has to be monitored closely as the option approaches the expiration date. As the option approaches its end date, the premium shrinks quickly and the option trades in sync with the underlying stock so there's less to be gained from the option itself and more to be gained from the underlying stock. That loss of premium may make the difference on whether the option is sold or kept. The trade become more and more stressful as it approaches expiration and it's something to take into account trading options. But if executed correctly and the underlying stock move in the right direction, it can be a very lucrative strategy.

My Strategy Going Forward. Since I'm comfortable trading options and well capable of executing an exit strategy if things go wrong, I expect to execute the option trade. For me the swing trade would cost $11,360 for every round. If the only course of action for some traders is to sell cash secured puts at the lower channel, then this strategy would require that $11,360 be available in case the trade went south. But with a margin account and a little discipline, naked puts and calls can be sold and the leverage becomes obvious. This is, however, a risky trade and shouldn't be performed unless the investor understands all the things that can go wrong. But for me the leverage is an advantage and I'll use the income to actually buy shares of the company. Overtime I'll eventually own shares of this company that was bought with money earned in the market rather than using my own funds. And with those shares I can easily implement a swing strategy.

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Momo and the Golden Cross

4/9/2018

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For anyone who has not yet come across the concept of the Golden Cross, you're missing out on one of the easiest Bull Signals to understand. But first you have understand the idea behind moving averages. A moving average adds all the closing prices of a stock from a given period (example 50 days) and divides it by that same number (50) to arrive at an average. Then as each day passes the entire data set is updated which is what creates this "moving" average. The result is that the moving average strips out the intra-day volatility of the stock share price to create a trend that can be tracked. By plotting averages of different values on a stock chart, we can see when a shorter term average moves above or below a longer term average. A Golden Cross is defined when a stock's 50 day moving average rises above its 200-day moving average. And this is viewed by traders as a very bullish signal.

On this past Friday we saw the Golden Cross occur on the chart of MOMO despite the stock being down that day. That may seem confusing for beginning investors but the moving averages have squeezed out the volatility of daily fluctuations to show everyone what's really happening from a longer term view. For me this is a signal to sell short term puts below the 200 dma and short term calls just above the recent high of $40.45 per share. This can be easily done with MOMO because these shares have weekly options for sale. For me this is a huge benefit because I am provided with several opportunities from which to choose my path forward. It also so happens that these options are pretty expensive so they'll bring in a lot of income. I believe it's fairly easy for me to collect approximately 2% per week. And that's a nice income from a small amount of risk.

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Investing

Karyopharm Therapeutics

Options as a Strategy

Audentes Therapeutics

A Weibo Swing Trade

Momo and the Golden Cross

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