Par Pharmaceutical short squeeze. chart and commentary (PRX)
A classic short squeeze played out today in a thinly traded biopharm stock, ticker = PRX. Now what makes this price action worth highlighting is the fact it was moving on zero news. You might ask what on earth caused me to pull this stock up?
1. It was breaking highs (screener)
2. There was repetitive buying on the offer or a few cents over in the stock 100 shares at a time
3. This told me someone was hiding their true size (meaning big size)
4. Price action in the 17.5 calls, they would take anything eventually pulling the offer as high as 4.5o from .70 c
5. volume precedes price/volume confirmed price action
Once all these criteria were met, i entered the trade per the options. I quickly realized this was not normal buying this was someone who was forced to cover shares taking every single offer no matter how large the gaps in the book were. When it was all said and done the stock was up 12% in mere minutes. My hypothesis was confirmed as FDA approval was announced at 6:30 PM est. Someone knew about this news before hand, shady in my book but it presented a unique trading opportunity which if you know how to identify you can capitalize