Action Alert: Take Half Profits on DIA
Lock in 68% Gainer
PLAY: Sell half of your DIA April 70 Puts (DIJ PR) at market, good for the day. Hold the remaining half.
Dear Bottarelli Research Member,
Our so-called “CYA” plays are doing their job.
In case you’re new to Bottarelli Research LEAPS, CYA stands for “Cover Your A**,” which is a phrase that I used to describe two hedge positions that I recommended on January 26th.
Basically, these two plays are designed to move up as the markets move down, which offers you downside protection against the steep losses we’ve seen recently. One such play was the Dow Diamonds April 70 Puts (DIJ PR), which we entered for $2.70. As I write, these puts have traded as high as $4.55, good for a nice 68.52% gainer. Let’s lock in profits on half of these puts now!
PLAY: Sell half of your DIA April 70 Puts (DIJ PR) at market, good for the day. Hold the remaining half.
The second CYA play was the CBOE Volatility Index May 60 Calls (VIX EN). As you can see from the VIX chart below, the volatility index is nowhere near the highs that it set back in October and November. In other words, despite the fact that the major market averages are setting 12-year lows, we still haven’t seen the level of investor panic that we saw late last year.
This tells me that we could still have some major downside action in front of us. Therefore, continue to hold these calls. If you have yet to enter them, consider this trade still good at today’s prices. After all, stay protected!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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