Bigworld, That's a big position, but the stock does have 'homerun' potential for intrepid investors who can handle the risks. My approach with biotech was based on Andy Grove's philosophy that 'Only the Paranoid Survive', which fits with the unpredictable nature of the bio sector.
Fwiw, I only bet big once on a bio stock - Dendreon, and it was only for a few days. I managed to get a $40 K profit, but it could have easily been a disaster. Selling the day before would have yielded an 80 K profit, but selling a day later and the entire gain would have evaporated into a big loss. So it turned out OK, but I dodged a bullet, and never did that again.
One strategy we used back then was to take a position during the lead up period to a 'binary event', ie a key clinical trial data release, FDA approval decision, etc. You would get in for the 'pre-event' run up period, where the stock usually rises in anticipation of the event, but then you grab the profits prior to the actual event. This was a much lower risk strategy than sitting long through a binary event, which is mega risky. Riding the 'pre-event run up period' can have good odds of producing a nice gain.
But you can still get burned, since sometimes the binary event (usually clinical data) is announced ahead of schedule, since companies are required to release such critical news quickly. So staying long over a weekend is risky, and bad clinical results often are released on a Friday after the close. I remember having a sizable bet, and the data was supposed to be released the next week. Most of the guys were staying long, but I luckily decided to bail right before the close on Friday. Sure enough, the trial had failed, and the press release came out right after the market close on Friday, and on Monday the stock got murdered. So dodged a bullet.
Anyway, my conclusion ---> 'Only the Paranoid Survive' :o) But far better to just avoid this activity altogether - it's just gambling, and in the end you will lose. 3X, bio stocks, these are for losers, imo.
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