Spectacular is probably not a good enough word for the results of the study for apixaban. Compared with the 50-years-old warfarin, apixaban can reduce strokes by 21% for AF patients; can reduce the risk of major bleeding by 31%; and can reduce the risk of death from any cause by 11%. For all of these counts, the differences are statistically significantly. For more detailed discussions on the results and the market impact, simply check the headline news for BMY.
As a physician, I'm really happy for patients to have a very effective and safe new drug to treat their disease with reduced risk of mortality. As a trader, I'm more than happy to make money, especially 65% in just a few days. Not shabby by any account. Here is info on my BMS positions, which were closed today as I had set up the sell orders in advance.
| 100 | 08/25 | 0.45 | 4581.15 | S | 08/29 | 0.78 | 7713.70 | 3132 | |||
| -100 | 08/25 | 0.15 | 1418.82 | BC | 08/29 | 0.24 | 2486.15 | -1067 | |||
As I said on Aug 27, my total risk for this trade was about $3000. I closed the deal with a total combined proceed of $2065 (3132-1067) , a profit of 65%. If I wanted to make the max profit for $7000, I would have to wait for a few weeks to bet that the BMS shares can further climb to $30. Is it possible? Yes, but in this kind of market, I didn't want to risk my partial profit already obtained for the max profit which may or may not be materialized. That's why I simply took whatever I had got and walked away.
This is not kind of trade a general retail investor can easily make by stock shares. The amount (i.e. 100 contracts) of call options I bought or sold was equivalent to 10,000 shares of BMY stocks. If I were buying stock shares directly, it would have cost me $280,000 to set up the trade. Of course I didn't do that. Instead, I used call option spreads to effectively control the same amount of stock shares but with much less cash required. Effectively I had significantly reduced my risk but greatly enhanced my profit margin.
I guess you can guess now why I'm so enthralled by the stock options. It is really a fascinating world if you want to explore it!!
A quick note about the Pfizer stocks. It appears you could make more if you traded this news via the Pfizer stocks. This was different from what I had expected but I'm fine with this miss. That's the nature of speculation that no one can be sure about anything. Pfizer has got two doses of good news, one for an approval for a lung cancer drug last Fri and the other one for this promising bloodthinner. If you happened to make this trade with Pfizer, then pat on your back to congratulate yourself.
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