Tekmira Pharmaceuticals (TKMR) Surges Nearly 40%, Call Options …

ByDave Tony current, disease, market, nasdaq, real, stock, trade, watch-list Comments Off

MomentumOptionsTrading.com Midday Update for 8/8/2014

Tekmira Pharmaceuticals (TKMR) Surges Nearly 40%, Call Options Active

2:05 p.m. (EST)

It has been an incredibly busy week with late nights and early morning wake-ups, but the action has been worth it.

I have done extensive research over the past few weeks that has kept me well prepared in predicting this week’s continued volatility and weakness and, while there is a rebound today, I can’t wait to do this weekend’s chart work.

I mentioned that my Watch List is loaded with a bevy of possible option trades to play a continued breakdown or a rebound in the market, as well as earnings, biotech, and special situation trades.

With so much going on, it is important to keep track of what trades you want to get into and which ones look better than others. It is also important to do research, homework and chart work so that you don’t go into trades blind and are able to weed out the weaker candidates. This also means that new candidates can move more quickly than anticipated, and golden opportunities can be missed.

One company that I added to my Watch List earlier this week was Tekmira Pharmaceuticals (TKMR, $19.74, up $5.47) amid the growing concerns over a possible Ebola outbreak. As you can see, shares are zooming higher today on word that the FDA could allow the use of a drug to treat the disease.

I had never heard of the company until Tuesday and that’s when I started doing some Googling. Shares were at $14 when I added the stock to my Watch List, but I wanted to do some chart work and see how liquid the option chains were before entering into a possible trade on the Canadian-based company.

While my research is far from complete, I have missed a jaw-dropping move in the call options.

It would have been highly doubtful that I would have swung the bat on the Tekmira Pharmaceuticals August 17.50 calls (TKMR140816C00017500, $3.10, up $2.75), which are up a stunning 785% after closing yesterday at $0.35. The options have traded to a high of $3.40 after opening at $0.75, but they expire next Friday, and it would have been a very risky trade had I recommended it on Monday.

On the other hand, the Tekmira Pharmaceuticals September 17.50 calls (TMKR140920C00017500, $4.40, up $3.15) have 42 days before they expire and would have been a safer alternative to play a possible move in the stock. These calls are up 252% today after closing at $1.25 on Thursday and have kissed a high of $4.50.

Obviously, I would not suggest chasing these options at current levels, but I am upset that I couldn’t get the research in before today’s breakout. However, I did get subscribers into another biotech trade that has similar characteristics. Keep your fingers crossed that the jackpot comes our way.

“Plan the trade, trade the plan.”

This was the most important piece of advice I gave this week, and I have done my best to show you some of the signals that I have used to play the market’s current downslide.

While most professionals were patting themselves on the back saying they knew this pullback was coming, the real question is, “Was that it, or is there more to come?” A broken clock is right twice a day, but it’s not a good keeper of real-time action.

This year’s biggest story has been the VIX, which is, or was, supposedly broken. Believe it or not, it is once again getting attention and more airtime talk, as the suit-and-ties now want to talk about the VIX.

I will have some February reminders and quotes for you this weekend and for Monday on what to expect for next week, but, for now, I want to wrap up the week and get you updated on our current trades.

With a few hours of action left ahead of the close, the Dow is up 140 points to 16,508, while the S&P 500 is higher by 14 points to 1,924. The Nasdaq is gaining 27 points to 4,362, and the Russell 2000 is advancing 7 points to 1,127.

While most pros are telling you to stay out of the market or wait for better prices, I have said not to be scared and to get ready for a fun ride.

I will be back Sunday night with the Weekly Wrap and on Monday morning with the Daily. Until then, have a great weekend everyone!

Author

Dave Tony