ENCY gets whacked!

One of my holdings, ENCY, got hammered today. It had been cruising along at $5.80 +/- for a week or so, then at 2:00 today they had a conference call and released the information that the FDA was requesting some additional information on their hopefully, maybe, someday, soon to be approved hypertension drug. The stock immediately fell off of a 20%+ cliff, closing the day at $4.49.

Good news: I had sold the Jan5 calls on 11/16 at $1.60 and bought them back today for $0.15, a pretty nice gain.

Bad news (maybe): I bought the shares for $5.92 on 11/16, so I am running about even on the overall covered call trade. However, I still own the stock, so I gain on any increases in the stock price.

I believe that the market over reacted to the news today, and the stock should rise again. I will hold onto the shares for a few days and see what develops. I would like to sell at $5.00 or better to realize my original projected profit.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: