Paul writes: Why does a strong yen accelerate the unwinding of the so-called “yen carry trade”? And what are the ramifications of such an event?
Jeff Macke explains: the yen is a heavily-shorted asset that’s going up in price and people have to buy yen to get out of the trade. As it ramps, people who do the carry trade get crushed and people on the other side of the trade “smell blood.” It’s bad for Japanese multinationals in the same reason the dollar is good for U.S. multinationals. Jeff likes the short Sony (SNE) trade on this. Just don’t get long trading currencies unless you are a currency trader, he said.
Jackie & Lou from New York write: We bought the [Short Dow30 ETF] (DOG) a few days ago. Do you think that this trade is done or will we see another quick dip or two so we can make some fast money?
It’s a good play today with a tight stop on resistance, Jeff Macke said. The DOG works as a nice hedge; it’s essentially a way to take some off the table without actually doing so.
Sue from Florida writes: Just like Guy Adami, I love Pete. I need another Baidu.com (BIDU). Any suggestions?
Pete Najarian is bullish on the red-hot VMware (VMW) but also thinks the casino stocks will go higher as the Macau story unfolds.
Steve from Montana writes: With the dollar dropping like a lead balloon, are there any large-cap companies out there that derive most of their earnings overseas? Kind of a double-whammy? Or am I too late as usual?
Jeff thinks Steve may be a little late in that he won’t be catching the bottom, but this is a muli-year trend that doesn’t show signs of easing right now. Go with names like Hewlett-Packard (HPQ) or Coca-Cola (KO), Pete said. Guy thinks Freeport-McMoRan (FCX) will do the job.
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Trader disclosure: On Sept. 13, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Najarian is Long Build-A-Bear, is short Goldman Sachs (GS); Finerman is short Leap Wireless.