Take DXD Profits, Part II

Now Lock in Gainer!

By Bryan Bottarelli
Monday, March 02, 2009 9:34 AM EST
Mon, 2 Mar 2009 14:34:00 GMT

PLAY: Sell your DXD March 77 Calls (DZS CI) at or above, $6.80, good for the day.

Dear Bottarelli Research Member,

Good morning. Late last Friday, we attempted to sell our DXD March 77 Calls (DZS CI) at or above $5.50, which would have locked in a quick 22% gain. Luckily for us, these prices never triggered, which left us holding these Ultra-Short calls going into today. And as you know, the major market averages have once again opened to the downside, which has again set new 52-week lows. Therefore, let’s use this selling pressure to lock in our DXD profits now!

PLAY: Sell your DXD March 77 Calls (DZS CI) at or above, $6.80, good for the day.

I’d also like to bring to your attention the current values of the CBOE Volatility Index (VIX). Despite the new lows in the market, the VIX indicates that we still have yet to see the dramatic “panic selling” that we witnessed in previous sell-offs. Back in October and November, for example, the VIX spiked up to almost 90 as the selling pressure intensified. But what concerns me today is that the VIX is nowhere near these levels right now. This could mean that we have a lot more selling pressure in the cards. Therefore, we’ll continue our strategy of adding short positions whenever possible.

VIX

As always, I’ll be out with further updates as the day progresses. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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