BVF - Biovail

This is a Short position that I entered on May 21st

Ticker symbol - BVF

Company - Biovail

Ex-Dividend date : May 20th.

Note about the Ex-dividend date: if I had shorted this stock one day earlier I would have been responsible for paying out the dividend in cash at $0.375 per share. Got to watch for those dates when shorting. Income trusts have monthly dispersements so they are best to just not short at all.

Unlike the HF example, I don't have a clue about what these guys do or where they are based. If anyone feels so inclined to look it up leave a comment if you have time. I don't intend to.

This is a classic swing trade for a downtrend but forms an important part of my strategy. Swing trading is basically trading with the trend. In a downtrend you short sell on the price peaks and cover or buy back in the valleys. You would keep doing that until the trend changes then you change your strategy to follow the uptrend. It really isn't fancy or all that difficult but the key would be to recognize the trend and enter many trades to increase the odds of getting the price movement that you want.

green dashed vertical line is my short sell date ( I use red for a typical purchase)

green dashed horizontal is the purchase price.

pink dashed horizontal is the Stop setting.

In a short sell the stop line below the purchase price means that the trade is In The Money (ITM), if the price RISES to the stop line it sells and there is typically (but not always...that's another story) a profit realized. So right now if the price went up I would still make about $0.15.

I expect the price to follow a similar pattern as in March which would have gained $2.50 per share had I traded at that time. Notice that trading for the price drop in a downtrend allows a much longer drop or a larger target to aim for than the price increases by about 2 to 1. This is why I believe it is important to short sell in order to follow the Counter Trend Positioning strategy. The regular long position, or the typical "buy" has a much smaller target which makes the trade riskier and I would like to have more profits to act as a cushion to be able to enter the long trades with confidence in order to be there when the price breaks the tend. I'll maybe expand on this another time.

JD.