Betting that the FDA will approve the medication and the stock will go up is one way to potentially get a lot of value from a stock purchase and subsequent sale.
Investors "bet" on stocks rising in value when certain news hits. They buy the stock before the potential news and may sell it afterward when the price increases. An example of this type of strategy is buying a pharmaceutical stock knowing that the company has a medication up for approval by the FDA. Betting that the FDA will approve the medication and the stock will go up is one way to potentially get a lot of value from a stock purchase and subsequent sale.