/biz/ - Business & Finance

what if you sought out a sector where companies most often experience sudden huge spikes in price (say, pharma?), and then buy a bunch of really cheap call options at really high strike prices with the hopes that one of them spiking hard will make you a bunch of money? would this be profitable or would you get burned to oblivion on all the contract costs? i imagine its the latter. on the flip side, what kind of scenarios would exist that would cause stocks to tank dramatically all of a sudden without anyone anticipating it, i.e. same idea but with puts?