Black Box Warning Short
In plain terms
When a drug accumulates fatal adverse-event reports in a short window (a black-box warning trigger), we short the sponsor for 3-6 months.
How it works
FDA black-box warning (strongest label change short of withdrawal) triggers prescriber pullback; sponsor stock reprices -8% event-day with -12% drift over 6mo.
Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- Faers adverse events
A data feed this strategy reads, refreshed on its normal schedule.
Expected edge
- Reported return
- -8% event-day, -12% 6mo
- Tested over
- T+1 to T+120d
Lerner-Beard-Sgouros 2014: -8% event-day, -12% over 6mo.
Example tickers where this is likely to fire
Illustrative only, the signal fires based on the live data, not a fixed list.
Related families
Pharma stocks drop after a spike in serious side-effect reports for a marketed drug. Short the day after the 7-day rolling severity z-score crosses +2.
When a whole drug class has a safety-event spike, we short the worst-hit company and assume the market rotates to alternatives.
Explore Black Box Warning Short on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.