Is biotech a good defensive play?

HoughtonAndAtkeson answered one month ago …

In general, yes, the biotech industry is less sensitive to broader economic conditions.

In fact, today in our Big Money Options service, we recommended a new call option trade for a biopharmaceutical company. Drug companies make drugs and this research firm helps them do it.

In addition to this company's Teflon armor when it comes to the economy, we saw some unusual trading activity in the name, which suggested that big money – the institutional investors – like this name, too.

We prefer options trading specifically because if you were to buy the underlying stock for this particular company, you could expect to pay around $27 per share. However, the call options we recommended are only about $3.70.

You get a lot more leverage for a lot less capital when you're dealing with options -- especially in this market.