4 Rules for Trading Biotech Spec Stocks

Two stocks that Cramer recommended last Thursday, Oct. 14 got crushed this week after an expected Food & Drug Administration approval never happened.

Everyone, including the “Mad Money” host, assumed regulators would bless a new diabetes medication being made by Amylin and Alkermes . But when the FDA on Tuesday requested more data rather than approving the drug, their share prices plummeted 50 percent and 30 percent, respectively.

So where did Cramer, and even the most negative of analysts, go wrong? What lessons has he learned from this week? He broke them down into four takeaways for any investors considering a little biotech speculation going forward. Watch the video for his full report.

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