A Play Off Biotech Volatility

Not that anyone is necessarily looking for extra volatility at this time, but if you head on over to the hepatitis C area of biotech this morning, you are certain to find it. Inhibitex (INHX) was pummeled this morning after Pharmasset (VRUS) -- which recently agreed to a buyout agreement with Gilead Sciences (GILD) -- announced its proposed treatment for the illness may cause liver toxicity. The news is also impacting Idenix Pharmaceuticals (IDIX).

These are names I've been watching for a while, looking for an entry point. Inhibitex was moving too fast this morning for me to even try and post a trade. I was in it too early in any case, although the bounce-back has allowed me to step aside on shares. What I have done is added some January $10 calls on Idenix and February $12.50-to-$15 call spreads on Inhibitex. These are both aggressive trades, but the limited risk vs. a strong reward potential make them attractive for a very small portion of a trading portfolio....242 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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