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Options Action: Hedging Your Bets

Monday, 26 Apr 2010 | 5:39 PM ET

The options market is saying the best of earnings season is over. If you agree, you might want to hedge your bets. But how?

Mike Khouw of Cantor Fitzgerald suggests an options strategy. Here’s an example using Broadcom .

Broadcom
Stock at 36: stock Replacement strategy
Buy June 36 Calls for $2
Make money if stock is above $34

Options Action
The dark side of earnings is ahead, with Mike Khouw, Cantor Fitzgerald.

Learn more about this trade. Watch the video now.


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Trader disclosure: On Apr 26, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Grasso Owns (NDAQ), (DYN), (LPX), (ASTM), (ABK), (BAC), (BGP), (C), (CVGI), (JPM), (NEM), (PRST), (PFE), (BA), (T), (CSCO), (X); Karabell Owns (CAT), (GS), (FXI), (FCX); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (BTU), (NUE); Najarian Owns (C) Calls; Najarian Owns (STEC) Call Spread; Terranova Is Short (CMA), (LCC); Terranova Owns (HES), (TER), (SWN), (XCO), (AXP); Terranova Owns (C) Calls; Scaramucci Owns (GS), Skybridge Owns (GS); Seymour Owns (AAPL), (BAC), (GE), (INTC), (MSFT)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLI)

For Jeffery Harte
Sandler O'Neill Served As Financial Advisor To Investor Group That Agreed To Buy First Republic Bank From (BAC)
Sandler O'Neill Recvd. Inv. Bank. Comp. From (C), (JPM) In Past 12 Mos.
(JPM) Was An Investment Banking Client Of Sandler O'Neill In Past 12 Months
Sandler O'Neill Expects To Receive or Seek Inv. Bank. Comp. From (BAC), (BK), (JPM), (C), (NTRS) In Next 3 Mos.
(BAC), (C), (JPM), (MS), (BK), (NTRS) Are Clients Of Sandler O'Neill
Sandler O'Neill Has Received Non-Inv. Bank. Comp. From (C), (JPM), (BAC), (NTRS)
(GS) Is A Non-Inv. Bank. Client Of Sandler O'Neill
Sandler O'Neill Is A Market Maker In (NTRS)

For Jim Suva
Citigroup Global Markets Or Affiliates Have Received Investment Banking Compensation From (GLW) For Services Provided In Past 12 Months
Citigroup Global Markets Or Affiliate Received Non-Investment Banking Compensation From (GLW) In Past 12 Months
(GLW) Is Or In Past 12 Months Was An Investment Banking Client Of Citigroup Global Markets
(GLW) Is Or In Past 12 Months Was A Client Of Citigroup Global Markets (Non-Investment-Banking, Non-Securities-Related Services)
Citigroup Global Markets And/Or Affiliates Has A Significant Financial Interest In Relation To (GLW)

For Patty Edwards
Edwards Owns (AAPL) For Clients
Edwards Owns (BAC) For Clients
Edwards Owns (BAX) For Clients
Edwards Owns (BRK.B) For Clients
Edwards Owns (C) For Clients
Edwards Owns (CPB) For Clients
Edwards Owns (CSCO) For Clients
Edwards Owns (GE) For Clients
Edwards Owns (GOOG) For Clients
Edwards Owns (HD) For Clients
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Edwards Owns (JNJ) For Clients
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Edwards Owns (KO) For Clients
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For Steve Grasso
Stuart Frankel And Its Partners Own (AMR)
Stuart Frankel And Its Partners Own (BAX)
Stuart Frankel And Its Partners Own (DYN)
Stuart Frankel And Its Partners Own (CVGI)
Stuart Frankel And Its Partners Own (CUBA)
Stuart Frankel And Its Partners Own (DYN)
Stuart Frankel And Its Partners Own (GERN)
Stuart Frankel And Its Partners Own (HSPO)
Stuart Frankel And Its Partners Own (MERC)
Stuart Frankel And Its Partners Own (NWS.A)
Stuart Frankel And Its Partners Own (NYX)
Stuart Frankel And Its Partners Own (PALM)
Stuart Frankel And Its Partners Own (PDE)
Stuart Frankel And Its Partners Own (PFE)
Stuart Frankel And Its Partners Own (PRST)
Stuart Frankel And Its Partners Own (RDC)
Stuart Frankel And Its Partners Own (TLM)
Stuart Frankel And Its Partners Own (XRX)
Stuart Frankel And Its Partners Own (SDS)
Stuart Frankel And Its Partners Are Short (QQQQ)
Stuart Frankel And Its Partners Are Short (CL)
Stuart Frankel And Its Partners Are Short (AAPL)



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