Big-Mover biopharma events are clinical trial results for biotech stocks to watch, that are scheduled to read out in the upcoming 6 weeks or less, and are likely to move an underlying biotech stock by at least 15% up or down
BPIQ's new Future Movers to Watch biopharma stock feature provides investors better opportunities for run-up play investment strategies without the risk of being invested fully in a Big-Mover stock at the time of the readout.
Now BPIQ and Amp provide Run-Up play picks for our subscribers, and have updated our Q4 2021 Run-up play list
BIQ subscribers have access to our full version of this article HERE and Amp's Q4 Run-up play picks HERE, which provides much deeper run-up analysis of past Big-Mover events, and identifies current run-up play opportunities, respectively. Learn more here.
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At BPIQ.com ("BPIQ) and its parent company, Amp, our goal is to provide information and insights to help investors make money investing in biopharma companies. To this end, BPIQ continues to provide its monthly Big-Mover events report. These events are important readouts for biopharma investors because they are likely to move an underlying stock by at least 15% up or down. Big-Mover events are based on a combination of the type and importance of a readout to an underlying stock as well as implied volatility on the underlying stock. Mainly due to the specific implied volatility metric that BPIQ has been testing, Big-Mover events currently are identified about 4-6 weeks or less before the scheduled event. In addition to monthly Big-Mover events, recently, BPIQ updated its biopharma stock analysis for subscribers to include Future Movers to Watch lists for upcoming months and even quarters (Subscribers see October Big-Mover article and associated Future Movers to Watch lists).
Like Big-Mover events, Future Movers to Watch events are typically clinical trial efficacy readouts and/or FDA approval/authorization decisions. However, underlying companies of Future Movers to Watch events do not show a high present implied volatility at the time we run the Big-Mover analysis. Usually, this is because the event is more than 6 weeks into the future. However, for some micro and small-cap biopharma companies there is no reliable implied volatility data. And more rarely there are some upcoming mover events that for whatever reason, the market has not identified.
There is a high likelihood of failure for all biopharma Mover events, and high likelihood of significant downward movement of an underlying company's stock price. Thus, like Big-Mover events, Future Movers to Watch events are warning flags for investors, of an upcoming high-risk event. To confirm that such readouts are typically negative, analyze any of BPIQ's Big-Mover event lists for prior months. For example, analysis of the September 2021 Big-Mover event scorecard shows that of 6 readouts that have occurred as of this writing, 4 readouts moved the underlying stock DOWN by more than 15% or more and none moved the underlying stock up by more than 2%. Looking back at the July/August Big Mover events, 2 events read out positive and moved the underlying stock up by at least 15% positive, 10 events read out negative and moved the underlying stock DOWN by at least 15%, and 5 events moved the underlying stock by +/- 7%. Thus, the July/August Big Mover events again confirm that most Big-Mover events will be negative events that move a stock down by at least 15%. Unfortunately, in our experience and view, although careful diligence can help eliminate some of the higher risk events, it is still extremely difficult, and likely impossible for anyone to consistently pick positive from negative Big Mover events with a high degree of confidence.
In the face of poor odds of picking a positive Big-Mover event, how do biopharma investors still have success? One possibility is to play underlying stocks of Big-Mover events with a negative/bearish strategy. There are a number of bearish options strategies, including the simple strategies of buying Puts or selling Calls. Another bearish strategy is to short the underlying stock across a Big-Mover event readout. Another strategy is to avoid or reduce investments in attractive companies across their Big-Mover readouts. A substrategy of this approach is to invest in Future Movers to Watch companies weeks, or preferably months ahead of a Big-Mover readout in the hope that the underlying stock will run up ahead of the Big-Mover event. Then you can get out of the stock completely before the event, or reduce your investment into the event.
BBIQ subscribers have access to our full version of this article HERE and Amp's Q4 Run-up play picks HERE, which provides much deeper run-up analysis of past Big-Mover events, and identifies current run-up play opportunities, respectively. Learn more here.
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