UPDATE: Optimer Pharmaceuticals (OPTR) - how I plan to trade in the next 2 days before FDA's approval decision

Optimer Pharmaceuticals (OPTR) has a PDUFA on May 30, but since May 30 is a US holiday, the FDA is expected to announce their ruling on the marketing approval of OPTR's fidaxomicin either on FRI May 27 or TUE May 31.  At this point, the consensus among investors is that the news will be out this FRI.  Assuming this is correct, we are merely 2 trading sessions away from potentially hearing fidaxomicin's approval by the FDA!


Fidaxomicin is a novel antibiotic for C. difficile infection (read here and here).  


Today's trend

OPTR has been hovering around $14 for the past few days.  Today, the stock finally broke through $14 and reached a 52-week high of $14.20, at which time a lot of traders offloaded their shares to lessen their risk profile ahead of Friday.  This caused OPTR to drop sharply from the peak down to $13.79.  During the downtrend, I sent out a tweet with the following message - "should see another $OPTR pop later today".  Indeed, from that point on OPTR started climbing back up and eventually touching $14.07 at 12:06 p.m. PT.  This second intraday peak stayed around for 6 minutes, an interval during which I sold all of my June $17.5 calls (67% profit) and half of my $15 calls (100% profit) (see my tweet).  I still believe that OPTR's drug will receive FDA's approval and that there is another $1-2 upside, but I wanted to lower the risk of not being able to sell my large position immediately after news release (especially the $17.5 calls), and this was the basis of my trade today.


Trading map
There are 4 strategies I may use to trade OPTR between tomorrow and FRI (or TUE):    
1) Sell the rest of my $15 calls IF OPTR pops above $14.5
2) Sell the rest of my $15 calls and buy back cheap $15 calls IF a bear raid happens on FRI*
3) Sell the rest of my $15 calls post approval IF/WHEN approval is announced
4) Buy puts with a strike closest to the post-approval peak EXPECTING a post-approval drop (the 'Slide')


*This is a little tricky because one needs to make the assumption that a bear raid will occur (my feeling, based on what happened to a few other companies including SPPI, is that there is a ~70% chance that a bear raid may take place)


I may use one or a combination of the above strategies, which I think will maximize the profit from trading OPTR.  


Follow me on Twitter (@michaeljuan01) for instant updates.


Disclaimer: At times when I am unable to send out 'instant' updates, I will try to tweet my trades ASAP!