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Joe Terranova's Best Biotech Play for 2011

Throughout the year, the "Fast Money" traders have been proponents of the biotechnology trade. Looking forward to 2011, Joe Terranova thinks will again be a good bet.

"I think in 2011, biotech's the place to be," said Terranova, chief market strategist at Virtus Investment Partners. "XBI ETF— that's the way to do it. Be diversified."

Terranova said he likes biotech because pipelines will likely close up for big pharmaceutical companies next year. When that happens, they'll have to reach out to biotech companies because they have the research and development abilities needed. He thinks the safest way to play the space is through the SPDR S&P Biotech ETF.

Watch the video to see the full conversation with Terranova.

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Trader disclosure: On December 2, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders;
Joe Terranova Owns (FCX), (CMA), (UPL), (C), (PEP), (VRTS), (OXY), (GS), (POT), (AAPL), (NKE) and (OIH). Guy Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC) and (MSFT). Tim Seymour owns (AAPL), (BAC) and (F). Jon Najarian owns (AAPL), Is Short (AAPL) Calls. Jon Najarian owns (GS), Is Short (GS) Calls. Jon Najarian owns (JPM), Is Short (JPM) Calls. Jon Najarian owns (CME), Is Short (CME) Calls. Jon Najarian owns (TIF), Is Short (TIF) Calls. Jon Najarian owns (RIMM), Is Short (RIMM) Calls. Jon Najarian is long (AMZN) call spreads. Jon Najarian is long (IBM) call spreads. Jon Najarian is long (NFLX) call spreads. Jon Najarian is long (DE) call spreads. Jon Najarian is long (GT) calls. Jon Najarian is long (AA) calls. Jon Najarian is long (CMC) calls. Steve Cortes is short (XRT). Steve Cortes is long S&P 500. Steve Cortes is short (LVS). Steve Cortes is long (TSN). Steve Cortes is long USD vs. Mexican Peso, Australian Dollar, Euro. Steve Cortes is long U.S. 2-year Treasuries.

JOE TERRANOVA
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (ALK)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EPR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LPHI)
Virtus Investment Partners Owns More Than 1% Of (MGRC)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

GUY ADAMI
Adami’s wife works at Merck

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (GLD)
Accounts Managed By Kanundrum Capital Own (GDXJ)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (JPM)
Accounts Managed By Kanundrum Capital Own (C)
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (GT)
Accounts Managed By Kanundrum Capital Own (DE)
Accounts Managed By Kanundrum Capital Own (AAPL)
Accounts Managed By Kanundrum Capital Own (MON)
Accounts Managed By Kanundrum Capital Own (BG)
Accounts Managed By Kanundrum Capital Own (TBT)

SIMON BAKER
Baker Ave owns (AAPL) for clients
Baker Ave owns (C) for clients
Baker Ave owns (CML) for clients
Baker Ave owns (F) for clients
Baker Ave owns (GT) for clients
Baker Ave owns (LEN) for clients

JOE LAVORGNA
***No Disclosures***

PATRICK MCKEEVER
***No Disclosures***

ANTHONY SCARAMUCCI
Scaramucci and SkyBridge Capital owns (KIRK)

BRIAN STUTLAND
pending...

CNBC.com with wires.

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