Monday, June 7, 2010

Profiting From Markets Crashing or Rising With The Russel 2000

Markets have been extremely volatile and some are ecen raising the possibility of a one day crash, like Black Monday 1987. yet this morning I heard that put-call ratios are very bearish, indicating investors are indeed expecting the markets to head lower. At the same time, an analysts says that precisely because of that, the markets will rebound.

What's an investor to do? This is why we use straddles, where the possibility exists of profiting regardless of direction.

Here are IWM (Russel 2000) straddles for June and July. Note that there are only 2 weeks left for June expiration.

Computed with StraddlesCalc Tool.

Please do your own due diligence. This is not advice. Options are very dangerous and may cause 100% loss.

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