Bank Gains in This Sector Every Month

in Gold GOld juniors by admin — March 13, 2010 9:23 am | no comments

Editor’s Note: I’m deviating from the usual Wealth Daily weekend wrap-up to present you with what I consider one of the best investing strategies around today: trading FDA decisions. Enjoy, Ian Cooper ————————————————— Very few things have such an impact on biotech stocks. FDA decisions are among the biggest factors, but given the FDA’s unpredictable nature, there’s still no such thing as a sure trade. Yet it really doesn’t matter what the FDA says. What does matter is being in the know and being in the right place at the right time. Most of us who use the FDA calendar and Phase III trial dates know one thing: The price of a biotech and pharmaceutical company will go up as the date in questions draws closer. And if you want to maximize your potential return, have any pending dates in hand at least one to three months in advance. (I should note that in some instances, you can buy a stock days in advance using conference dates.) Advertisement Thanks to a new California law… This wind energy stock could deliver gains of more than 112% in the next 4 months . Click here for more. In the case of our recent Dendreon (DNDN) trade, which produced 65% and 71% gains, we were able to profit within a day or two of a presentation at the ASCO Genitourinary Cancers Symposium. Buying ahead of this conference�— where speculators anticipated an explosive upside move�— resulted in quick gains. You see, as an FDA decision date, Phase III result date, or conference nears and people expect to hear good news, crowds of speculators and traders start coming in to buy the stock, sending the stock up. Intermune (ITMN) is a good example of this; it began popping in December 2009 ahead of FDA news: � � This happens over and over again with many biotechs and pharmaceuticals. The only key is having the information in as far in advance as you can. We also know that FDA approvals, rejections, even Phase III study results can make or break any pharmaceutical company. There have been instances where a company has lost 90% of its value… and there have been instances where a company rises 800% in a single day. But again, the key is to profiting is having the decision dates months in advance … and being well hedged. If we’re trading an FDA date months in advance, we’ll play a call option as speculators rush in. If we’re trading that same decision weeks in advance, we’ll hedge the bet with a put and a call, oftentimes successfully betting that one side will significantly outperform the other. While we’re doing our due diligence with trades two to three months out, we’ve put together a list of some biotech companies facing decisions that’ll send stock prices to the moon or kill them off. Fortunately, with options, it doesn’t matter what happens. You can profit either way. Options Trading Pit , for one, was able to profit from some of…