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How to Score Big Gains with Biotech Penny Stocks

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Setting Your Investment Radar to Pick up Biotech Penny Stocks

biotech penny stocks

Biotech penny stocks offer substantial opportunities for gain because everything behind the stock is an inherent risk. Although this sounds like a bad thing, for bold investors it is a perfect market. As companies hover below the radar, share prices range from fractions of a penny to a dollar or two. Once a biotech company develops a successful treatment and obtains FDA approval, they become a shooting star. Share prices rise as news circulates, and a perceptive trader can make thousand percent gains on biotech penny stocks.

Hedging Bets in Biotech Penny Stocks

There are many what-ifs related to trading these stocks. An investor is gambling on the success of the company’s technology, approval from governing bodies and positive reception from the public. In order to maximize the chance of choosing winning biotech penny stocks, investors should develop an understanding of the healthcare world. Knowledge regarding current needs in medicine, understanding public fears about current diseases and a basic comprehension of government regulations can help investors predict which efforts will be successful among biotech companies.

An example of a strong biotech penny stock over the past few years is YM BioSciences (YMI).  From September of 2010 through October 2011, YMI saw a total gain of approximately 42% in its stock. At its height in early 2011, the stock had gained over 150% since September. Much of the driving force behind the gains was news about YM BioSciences’ work in cancer treatments. Investors do not have to be experts to know cancer treatment is going to be a news worthy phrase, and a company touting such a phrase is likely to see future gains.

YMI stock dropped to $1.00 per share in November of this year, but press releases in the last few weeks pushed it back up to $1.70 per share.  This is another gain of +70% for smart biotech penny stocks traders!  YMI indicates they are working on treatments for yet another disease. Stock experts are predicting this company will have staying power in the market. Like many biotech penny stocks, YMI is volatile, providing even more reason for traders to stay abreast of medical news.

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