Want to jump straight to the best? Most of our users prefer Interactive Brokers for stock trading.
Biotech companies are in the eye of the storm as the world recovers from the global pandemic. Government institutions and professional traders are banking on biotech stocks to continually develop a vaccine and boosters that can eradicate COVID-19.
Tilt your stock portfolio toward biotech companies now and you could stand to make substantial profits in the near future.
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You can also find cost-effective stocks under $20 to trade daily on the stock exchange.
Overview: Biotech Stocks
Biotech companies are a subsector of healthcare stocks that primarily focus on developing new drugs and treatments for medical conditions, diseases and viruses. The stock value and growth potential of a biotech firm depend on the type of diseases it treats.
For instance, a biotech firm working on breast cancer treatments, which has nearly 300,000 new cases in the U.S. each year, might be more valuable than a company that is developing drugs for Ogilvie’s Syndrome, a rare disease that only affects 1%–3% of the population.
Every new drug developed by biotech firms has to be submitted to the Food and Drug Association (FDA) for approval. Medical companies spend years developing a new drug but may fail to get it approved by the FDA. Some of these drugs will never hit the shelf of pharmaceuticals even after countless clinical trials. On the other hand, if a biotech company gets a new drug sanctioned by the FDA and the demand is high, the stock value can double or even triple overnight.
Best Online Brokers for Biotech Stock
An online broker can help you trade biotech stocks with speed and precision.
You can gain access to professional-level trading tools such as stock screens by opening an account on these platforms. Online brokers let you apply custom filters such as setting a price range to narrow down stocks under $10 within minutes.
Explore these online brokers to get started today.
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.
Webull is widely considered one of the best Robinhood alternatives.
- Active traders
- Intermediate traders
- Advanced traders
- No account maintenance fees or software platform fees
- No charges to open and maintain an account
- Intuitive trading platform with technical and fundamental analysis tools
- Does not support trading in mutual funds, bonds or OTC stocks
Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.
Get started right away by downloading Moomoo to your phone, tablet or another mobile device.
- Cost-conscious traders
- Active and Advanced traders
- Over 8,000 different stocks that can be sold short
- Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
- No minimum deposit to open an account.
- No chat support
It seems like new digital investment management platforms are sprouting up left and right, and for good reason — there’s a great need for easy, straightforward investment management that doesn’t cost an arm and a leg in fees or to get started. If you’re new to investing or an old hat who wants to make the switch to a virtual manager, deciding which features you need can be confusing if not overwhelming.
If you want a no-frills financial management platform, Axos Invest (formerly WiseBanyan) takes a traditional but sophisticated approach to automated online investing.
- Traditional investors trying out an automated investor for the first time
- New investors that want to take a hands-off approach to portfolio management
- Straightforward automated investing
- Relatively low account minimum and automated investing fee
- A solid roster of available investment account types
- Not a stand-out from other services if you’re someone who likes all the bells and whistles with your digital financial platform
- No direct relationship with a human financial advisor
This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.
Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.
Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.
- Price earnings growth valuations
- Easily evaluate investment opportunities
eToro is a broker that offers access to over 25 of the world’s most popular cryptocurrencies, forex and over 1600 stocks. They have a few unique education and useability tools. Traders can begin buying and selling in as little as 10 minutes.
eToro’s unique CopyTrader feature allows new investors to “copy” the buy and sell orders of professional investors, while the company’s eToro Club feature provides investors with a range of additional education tools and resources.
- Traders looking for an easy-to-use platform
- Traders who want to practice their trades using a virtual account before entering the market
- Simple platform that is easy to master
- CopyTrader feature that allows new traders to copy the same strategies used by professionals
- Virtual dummy account that gives you $100,000 to practice trades
- High non-trading fees
Features to Look for in Biotech Stock
- Earnings per share: You can determine the profitability of a company by its earnings per share (EPS). It is calculated by dividing the net income of the company by the total number of its outstanding shares.
- Price-earnings ratio: The price-earnings ratio (P/E ratio) is calculated by dividing the current stock price by its EPS. Based on the P/E ratio, you can assess if a stock is undervalued or overvalued. The lower the P/E ratio of the stock, the better an investment it is. Generally, penny stocks under $5 have the lowest P/E ratios.
- Medical innovation: Biotech firms can spend years conducting clinical trials to test a new drug. Keep a constant watch on any news regarding medical breakthroughs and FDA approvals to make the most of your trade.
Be Patient for Better Profits
Advanced medical technology has led to longer and more fulfilling lives. An investment in biotech stocks involves longer buy-and-hold periods, but if you are patient with your trades, you can strike gold when you least expect it.
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