Today I traded DNDN and lost $0.6/share.
I opened my IB's top gainer screener, and found that DNDN was down about 50%. The first idea is they have trouble on approval. So I decided to short DNDN. Then I found that IB just doesn't allow to short on this stock. And at the same time, I found that DNDN is rising from $7.6 to $8. I didn't see the whole graph of the pre-market and changed my mind to BUY because the idea that it may rise flashing into my mind. I bought at $ 8.05 and set stop at $7.5. Then the stock started to go down. IB didn't execute my order. So I cancelled the stop limit order and immediate sell limit at $7.45.
What I have learned from today's trading?
1. IB doesn't support stop order in pre-market. (Maybe because it is market order. I can try stop limit order later.)
2. I have to see the whole picture before action. If I did saw the whole picture, I won't buy it.
3. This is what I already know. For the price drop like 50%, I have never seen one stock will go up in that day. Normally, it is bio stock and some really bad news comes.
4. I should read the whole news.
Other thinks:
The news said their approval for the drug will be delayed. According to the news, I do think the drop is too heavy and I can expect it may rise again. But for the recent two days, it might go down further, maybe to $5. So what I think the best to do is to buy a call at $5 two days later for long term position.
For short day trading, actually, it is ambivalent. I am not sure if it will really go down because the news is not a worst one. Buy a put at current price for short trading is not a good idea. And this stock is not allowed to short, the only thing can do is :
1) Wait to see if today it will have a heavy drop. If it go down to $5 in half hour, maybe I can get $1 retreat profit.
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