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Biotech / Medical : Biotech Short Candidates
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To: kenhott who wrote (836)4/25/2007 7:38:50 AM
From: Robohogs  Read Replies (1) of 897
 
Ken,

I got nailed on just that scenario. I was short 2.50 call spreads on DNDN BEFORE the panel and someone exercised into my short April calls (God knows why - must have been trying to force a short cover thinking the short call guy was an ugly SHORT) right before the halt. After the halt, the brokerage bought the short in leave me naked on the long calls for May. Because the trade was a spread for a nickel, I had it on in what looked like notional size and combined with this being done in my fifth largest account, I got a margin call which they immediately began liquidating. Needless to say, they could have sold the long calls (which were worth like $15) but instead went in the wrong order and my account was liquidated (including the bull call spread which was the long part of my trade) except for 1100 shares worth of options. I stubbornly held the calls until $25 and got lucky and sold so I made my targeted return (plus an extra $5-6K) from a very low risk strategy only by taking a ton of risk. Moral: Watch the account twice a day if you do the trade and pick up the phone and talk to a human - don't use email.

Jon

PS Why do I have 5 accounts? Because I am too lazy to make sure I have all the records somewhere.
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