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Fast Money Mail - We Answer Your Trading Questions

Tuesday, 27 Nov 2007 | 7:47 PM ET

Time to dip into the Fast money mailbag and answer more of your questions.

Kevin from Indiana

Kevin writes, “Which sectors tend to perform well in a volatile market?”

Look for companies that pay high dividends, or have a low multiple replies Jeff Macke.

Fast Money Mail
Time to dip into the Fast money mailbag and answer more of your questions. Kevin writes, "Which sectors tend to perform well in a volatile market?"

Alan from Missouri

Alan writes, “Much is made of the put/call ratios such as those published by the CBOE. What guidance, if any, can the average investor gain from such statistics?

The put/call ratio is meaningless to me, says Pete Najarian. It’s based on shear volume. I want to know who are the buyers and sellers.

Tammy from Tennessee

“When buying puts for protection, how many puts do you typically buy versus the amount of stock held. How many strikes out of the money and how far out in time?

For S&P puts I buy puts that are 2%-3% out of the money explains Karen Finerman. For example, if the S&P is around 1500 I buy the 1460’s 2 months out, she says.

Roger from Ohio

Roger writes, could you explain what is meant when the panel says a stock is overbought or under-owned? How can you tell if a stock is either one of these?

If the top five owners of stock are hedge funds – the stock is over-owned says Guy Adami. Don’t hold stock that’s owned by fast money people.

Paul from Florida

Paul writes, “When the VIX is high, peaking out, it is a sign of a temporary bottom for the S&P. Is there an indicator to be used for an individual stock?

Personally, I look for someone to enter a trading pit and buy up calls, explains Pete Najarian. When I see that, I ask myself if it’s time for me to enter as well.

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Trader disclosure: On Nov. 19, 2007, the day this segment was taped, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Finerman's Firm Owns S&P 500 Options, Finerman's Firm Owns Russell 2000 Puts, Finerman's Firm Is Short (IWM), Finerman's Firm Is Short (MDY), Finerman's Firm Is Short (SPY), Finerman's Firm Is Short (IJR), Finerman's Firm Is Short (IYR), Finerman's Firm Owns (BIIB) Options, Finerman's Firm And Finerman Own (GS), Finerman's Firm Owns (HD) And (HD) Puts, Finerman Owns (HD), Finerman's Firm Owns (KSS), Finerman's Firm Is Short (LEH) And Owns (LEH) Puts, Finerman's Firm Is Short (LEN), Finerman's Firm Owns (LTD), Finerman's Firm Owns (MSFT) Options, Finerman's Firm Owns (TWX), Finerman's Firm Owns (YHOO), Finerman's Firm Owns (WMT), Finerman's Firm Owns (NDAQ), Finerman's Firm Owns (NYX), Finerman's Firm Owns (NMX) Options, Finerman's Firm Owns (BEAS) Options, Macke Owns (DIS), Macke Owns (YHOO), Najarian Owns (AMTD) Options, Najarian Owns (CSCO) Options, Najarian Owns (YHOO) Options, Najarian Owns (GOOG) Options

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  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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