Options Action: Biotech

With obesity drugs just a few of the advances expected from biotech firms this year, how should you trade the space.

Mike Khouw of Cantor Fitzgerald suggests looking at options in the Biotech ETF.

Here’s his trade.

IBB Options Chain - Stock At $92
Buy September 90-strike call for $5.45

How Khouw’s Options Trade Make Money
Profit above $95.45
Losses below $95.45

Learn more about this trade. Watch the video now!

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Trader disclosure: On Apr 12, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Grasso Owns (AAPL), (C), (BAC), (WMT), (T), (LPX); Karabell Owns (FCX); Karabell Owns (AAPL) ; Jon Najarian Owns (PALM) options; Jon Najarian Owns (CAR) options; Adami Owns (INTC), (GS), (AGU), (MSFT), (NUE), (BTU), (C); Terranova Owns (HES), (TER), (AXP), (MOS), (APA), (YHOO); Terranova Is Short (LCC); Pete Najarian Owns (AA) Call Spread ; Pete Najarian Owns (BAC) Calls; Pete Najarian Owns (C) Calls; Najarian Owns (DD) Call Spread ; Najarian Owns (DOW) Call Spread; Najarian Owns (LVS) Call Spread; Najarian Owns (MRVL); Najarian Owns (PCX) & Short (PCX) Calls; Najarian Owns (STX) Call Spread; Najarian Owns (TSO) Calls; Najarian Owns (YUM) Call Spread; Najarian Owns (YHOO) Call Spread; Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC), (JPM); Finerman's Firm Owns (TJX), (BBY), (JPM), (AEO), (IBB)

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