A couple of weeks ago I wrote a piece on some research I have done looking at stock movements after an FDA approval. I was essentially testing the “sell the news” hypothesis. My results strongly supported this as a strategy with 10 winners and 2 losers over a 2 day holding perdiod. I am therefore going to test it in real time with AFFY. To this end I have taken on a small position in AFFY April $13 puts, purchased for $45 per contract.
I want to emphasise that I am not pessimistic about AFFY’s long term prospects – this is a position that I only intend holding for a few days.