If you follow me on Twitter, I talk a lot about biotech stocks, which got hit hard in recent weeks as concerns about prescription drug prices mounted. The weakness in biotech stocks was exacerbated by long-standing concerns about stretched valuations and crowded or momentum positioning.

This created a lot of opportunity for traders. Exhausted biotech stocks were exposed for what they were, while other solid names were needlessly knocked down. I want to give you two biotech trades today, one downside put trade and one cheap biotech name that looks good for a short-term move higher.

Mannkind (MNKD) is among major development-stage biotech stocks focused on diabetes therapies. On Oct. 20, it jumped up to its 50-day average (red line), then pulled all the way back to flat. That’s very negative action, particularly for a stock that is already way down on its luck. Let’s see if we can help run salt in the wound.

To play this, buy the MNKD Nov. 20th $3.50 puts (MNKD  151120P00003500) at  $0.58 or less. When filled, set up to sell your position at the final target of $0.80 limit, good till canceled. Set a stop at $0.40, good after 10 a.m. ET only. 

PDL BioPharma (PDLI) is a $770 million company that manages a portfolio of patents and royalty assets. It is involved in the development of monoclonal antibodies for cancer treatment. Shares have been crushed this year amid expectations that the company’s big dividend would be cut, and I expect a near-term rebound. We entered at $4.65 on Oct. 20.

Buy PDL BioPharma at current levels, ideally at $4.65 or less. My short-term target for PDLI is $5.00, and I suggest using a  stop at $4.35, good after 10:30 a.m. ET only.

Jon Markman writes a daily trading newsletter, Trader’s Advantage, and CounterPoint Options, a service geared towards helping individual traders make steady, consistent profits with the VIX. Follow him on Twitter for his latest take on markets and innovation.