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.