This in response to a guy going long the FAZ 25 calls. He posted it on Stocktwits.com My 2 cents with 200% vols do a verticle spread instead. At least less risk and similar reward.

Charts in High RS Sectors 03 22 2009

This will do the charts as a slide show

I found these charts most interesting for the weekend.

GS possible trade

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Negatives to the trade:

They have earnings right before expiration(Thursday). yikes!

Volatility is extremely high so the chances for smooth sailing are low.

Technical Indicators are deteriorating.

Positives to the trade:

The protection is out a ways, you have time. (puts are further out than the calls you are selling)

You can hedge with stock, buy more stock or sell exisiting position, or short stock depending on how bullish /bearish you are.

You can also continue to sell calls against the position, after expiration, because the insurance is in July.

Your yeild is rather high per month- your upside is limited or capped but you are using that to pay for your downside protection. It is a range bound trade.

Underlying Indicators for Economic Acitivity

Are we melting away? Dr. Copper says no. BUT be patient and follow the charts.

Crude is also confirming some signs of inflation. Gold is pulling back but it is above it's bullish support line. (little dots at bottom of the chart) All these charts are bullish. The Stock market is BEARISH and keeps confirming the downturn. These things are the canaries inthe coal mine that I see inflation could come back to our economy. Will they? Who knows but so far it is the first signs of light.

Jamie

Believe in Yourself not Tips

I have been flat broke several times, but my loss has never been a total loss. Otherwise, I wouldn't be here now. I always knew I would have another chance and that I would
not make the same mistake a second time. I believed in myself. A man must believe in himself and his judgment if he expects to make a living at this game. That is why I don't believe in tips. If I buy stocks on Smith’s tip I must sell those same
stocks on Smith's tip. I am depending on him. Suppose Smith is away on a holiday when the selling time comes around? No, sir, nobody can make big money on what someone else tells him to do. I know from experience that nobody can give me a tip or a series
of tips that will make more money for me than my own judgment. It took me five years to learn to play the game intelligently enough to make big money when I was right.

Trade Less Wait More

There is a time for all things, but I didn't know it. And that is precisely what beats so many men in Wall Street who are very far from being in the main sucker class.
There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. No man can always have adequate reasons for buying or selling stocks daily or sufficient knowledge to
make his play an intelligent play.