Add SDS Calls

Adding Ultra-Short Protection

By Bryan Bottarelli
Thursday, September 03, 2009 10:21 AM EDT
Thu, 3 Sep 2009 14:21:00 GMT

PLAY: Buy the SDS September 45 Calls (SSH IS) at or under $2.40, good for the day. Place a protective stop limit at $1.20 and a sniper sell at $4.00.

Dear Bottarelli Research Member,

After adding to our ESI position, our trading ledger is biased to the upside. But in a market like this, where the directional bias can change every hour, we must always be diligent about having exposure to both sides of the coin. Therefore, let’s once again add a “safety-net” style position to our ledger by playing calls on the Ultra Short S&P500 ProShares (SDS – NYSE).

SDS

As you know, the SDS moves at a rate of twice the inverse of the S&P 500 index, which offers us a nice buffer if the markets move down. Let’s add this protective play now.

PLAY: Buy the SDS September 45 Calls (SSH IS) at or under $2.40, good for the day. Place a protective stop limit at $1.20 and a sniper sell at $4.00.

And as always…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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