I made my first options trade today. I bought June 06 puts on Nitromed (NTMD). It's a biotech company whose sole product is a drug called BiDil. BiDil is a drug for heart disease which consists of a combination of two drugs that are already available as generics.

Supposedly, the advantage is greater patient compliance. Basically, they can pay 10x or 20x as much, and take 1 pill three times a day instead of 3 pills three times a day. Even that's an overstatement of its advantages, because people who have health problems requiring this medication typically are taking a whole bunch of other drugs as well.

Insurance companies, obviously, are not beating down the door to pay for this treatment when there's an exactly equivalent generic. NTMD is losing tons of money, even though the drug is already on the market. Sales are far below estimates (about 80% below), and even if they make the estimates, the company will barely be profitable.

Lots of information at andrewtobias.com. He alternates between stocks and politics, but his stock analysis seems to be pretty good.