Streetinsight:" insider trading in biotech rampant"

Discussion in 'Wall St. News' started by mahram, Aug 8, 2005.

  1. the street insight has been making comments on a recent expose on biotech insider trading from hedgefunds who pay doctors to spill the beans and using other tactics learned by the fbi and interragotors to gather information. Is the former legal, where you pick up hidden thoughts, and ideas from body language, and other means, that arent direct.
  2. It's still harder than it sounds mahram, try getting filled in large size on options or even equity before a date. You need to trade equity- often you need to know more about entry and exit than fundamentals in this game to succeed. this all assumes you are trading size. If your trading 100 shares, then by all means go into the options market. Or for some increased return, mix your position or hedge it with slightly out of the money calls or puts. Attached is an excel file of all biotech trades I made in 2004, long and short. The return is not great, unless you can handle a 20% drawdown, then it would be over 100% return, assuming I upped the risk to the level where 20% drawdowns would take place. I think most people are too conservative to try to do that, but as you can see, the risk management gives a decent return, but its a bit of a shame really, missing out on 100% return because the drawdown could be 20-30%. Thats all my thoughts, hope you try trading this sector.