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Top Articles - High Volatility Investments
Penny stocks and options are high volatility investments that attract both the trader and the long term investor because of the small amount of capit
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
al required to make substantial gains as compared with less volatile higher priced stocks. The long term investor buys a stock believing that a comp
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
any’s value will increase over time and the stock price along with it. When he buys an option it is usually to reduce the risk in owning the underly
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
ng stock. The short term trader looks at things a little differently. Typically a trader looks for large percentage price movement over a short per
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
iod of time. Large percentage, short term price movements can be found both in options and certain penny stocks.
Penny Stocks are often defined as
Penny Stocks are often defined as
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
stocks priced below $5. It is often implied, but not necessarily the case, that penny stocks are also micro caps with capitalizations of less than a
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
out $250 million. Penny stocks can be found across the full range of capitalizations from micro caps to large cap stocks. For example, Sun Microsys
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
tems (NASDAQ: SUNW) met the definition of a penny stock for much of 2004, trading between $4 and $5. In late 2004, trading between $5 and $6 per sha
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
re, its capitalization was over $18 billion. The price of a large cap $18 billion stock would rarely be expected to move by a large amount over a sh
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
rt period of time. The largest percentage daily price gainers, of say 50% or more are typically stocks that started from $5 or less. But they are
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
typically micro caps.
As a group, micro cap penny stocks are avoided by large funds because prices are too easily affected by sizeable buy and sell
As a group, micro cap penny stocks are avoided by large funds because prices are too easily affected by sizeable buy and sell
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
orders and capitalizations are too small to affect a large fund’s bottom line. Buying more than 10% of a publicly held company carries with it certa
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
n insider responsibilities. Large funds must wait until stock prices rise typically above about $20 before they can become seriously involved withou
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
t moving the price and still have price movement impact their financial results. The small investor has a distinct advantage over large fund manager
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
s when he takes an early position in a good micro cap penny stock.
Short term options are best suited when the underlying stock has a higher price,
Short term options are best suited when the underlying stock has a higher price,
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
ay above $50. While it is more likely that a micro cap penny stock will gain 50% in a single day than it is for a higher priced stock, the typical 5
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
or 10 to one leverage that options provide makes it only necessary for a higher priced stock to move 5% to see a 50% gain in the corresponding optio
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
n price. There are several additional considerations involved in choosing an option. Not the least of these is the market environment. When chosen
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
properly, options for higher priced stocks provide the same large daily price movements of penny stocks. Lower priced stocks need to move by a large
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
r percentage in order to see a similar percentage move in the corresponding option. They are only likely to do so if they are micro cap penny stocks
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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