How To Short PTC Therapeutics Stock – PTCT Short

How To Short PTC Therapeutics Stock ShortWe better learn quick how to short PTC Therapeutics stock short after today’s run up.  Another day and yet another pharmaceutical/therapeutics stock that blows up on some positive news to the tune of 43.18%.  It is starting to really become a weekly occurrence with this sort of stock explosion in the healthcare industry.  But that is another article for another day.  As for this stock, let’s get to it and show you why this stock is a dangerous one to play long at this point.  If you are unfamiliar with my previous posts about the pharmaceutical industry, I would implore you to read them to see the pattern that is being discovered by yours truly. (I will link to the articles later in this review)
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Today is just a normal ho hum day for me and my day trading. (Actually…making a killing with my other shorts :) )  But, then the sirens start to blare because a stock has crossed a certain threshold in terms of percents that I like to pay close attention to.  PTC Therapeutics, which opened at $6.40 a share, had a positive news announcement regarding its Translarna drug.  The National Institute for Health and Care Excellence (NICE) gave PTC Therapeutics a great recommendation that all those patients that are above four years old and suffer from nonsense mutation Duchenne muscluar dystrophy (DMD) should consider the medicine.  The National Institue for Health and Care Excellence’s recommendation was in connection wtih a Managed Access Agreement (MAA) NHS England.  This gave the stock all the juice it needed to have a day high of $10.15 a share, before settling at the closing price of $8.73.  This gets us back to the question of how to short PTC Therapeutics stock short in order to take full advantage of this situation.

How To Short PTC Therapeutics Stock Short



The answer to the aforementioned question leaves me to pull out the educator in me.  In doing so, it brings up a few history lessons regarding stocks in the healthcare industry that go huge double digit gain in one day and the aftermath that follows.  I have written MULTIPLE articles about stocks that could be twins to our current PTC Therapeutics dilemma.  Let’s start with placing a few links down below here so you can get caught up on some recent history regarding said stocks.

Voyager Therapeutics
Acadia Pharmaceutical
Genocea Biosciences
Galmed Pharmaceuticals
Zynerba Pharmaceuticals
Relpysa Incorporated

Hopefully you have read the above articles to gain a perspective of what I have witnessed in the healthcare industry regarding these breakout stocks.  It seems that the only long investors that are making out on these stocks are those that are already positioned before the stock news breaks and the stocks have their climb.  It is then that public tries to jump on board and get some of the “easy money” as they believe it is going to be.  In reality, the news is already priced into the stock and all that is left is the truly easy short money.



All the above articles have some similarities.  The stocks overshoot their proper price and have follow up with one to two days of declines to bring the price to a more appropriate level.  Our current contestant of PTCT seems to be very close in representation to these other stocks.  What I love about shorting this stock is all the options that were bought going long today.  Over at the Schaeffer’s Research website, you can see them report a 4 to 1 ratio in calls to puts for PTCT.  So much upward pressure on this stock seems to put it at levels that it should not be at.  Do you see the same upward pressure on Monday?  Most likely the answer is no.  In the last half of dozen cases for us, the answer was no as well and it made us a boatload of money.  Will this stock play out the same?  If history likes to stay the course, then we already know it will.  But now we have to figure out exactly how to short PTC Therapeuctics stock the right way.

When I personally short these stocks, I am well aware of the situation before the end of the trading day.  I try to short the stock right before the market closes.  It has worked out very well for me in past situations of a similar nature.  Unlike others who write about their stock predictions after the fact, I put all my prognostications out in plain view well before the play takes place in order to allow you see what happens for yourself.  I do have to tell you that this play is usually only for a day or two.  After that, if the stock warrants a long position, that is usually a good time to consider it.  Sometimes it doesn’t and the short position stays in effect at a decreased amount in order to lock in most of the gains.  This is my answer to how to short PTC Therapeutics stock and others that react the same way in the healthcare industry.  It is because of my belief in transparency, that I have decided to make a investment page based on a $10,000 portfolio to show what these picks are earning in terms of returns.  I picked $10,000 because it is what I believe most people could come up with in order to invest.  So if you are interested in seeing the returns on a daily basis, I would suggest bookmarking that page and checking back as the portfolio grows or shrinks, depending on my good fortunes.

 

How To Short PTC Therapeutics Stock – PTCT Short

Comments

  1. PTCT played out just like you said. I actually went short covered for profits yesterday, then went short again today and covered. Two days of profits on PTCT. Thanks Moe!

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