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Options Action: Biotech

Monday, 12 Apr 2010 | 5:51 PM ET

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!

Options Action
Buying the biotech index at a fraction of the cost, with Mike Khouw, Cantor Fitzgerald.




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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)

Other Relevant Disclosures:
Credit Suisse Does and seek to do business with companies covered in its research reports (JPM)
Stuart Frankel & It's Partners Own (LPX)
Stuart Frankel & It's Partners Own (SDS)


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