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Fast Money Mail - We Answer Your Trading Questions

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?”

The same ones that trade well in a good market, exclaims Jeff Macke. Look for companies that pay high dividends and trade at a low multiple.

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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, replies Pete Najarian. It’s based on shear volume. I want to know who are the options buyers and who are the sellers. That's what matters.

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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?

I always own puts on the indexes, replies Karen Finerman. Typically, I buy S&P puts that are 2%-3% out of the money. In other words, if the S&P is trading around 1500 I buy the 1460’s 2 months out.

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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, replies Guy Adami. Don’t hold stock that’s owned by fast money people.

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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 a large volume of calls, explains Pete Najarian. When I see that happen, I ask myself if it’s some kind of bottom and time to start buying 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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