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Options Action: Playing The Uncertainty Of BP

Tuesday, 1 Jun 2010 | 5:54 PM ET

BP – it used to stand for British Petroleum. Now it’s more like Beyond Problems.

The scourge of the gulf has become a geyser of uncertainty as it frantically and fruitlessly tries to stop the flow of crude -- and cash! No less than $24 million drowns each day the spill goes unplugged.

BP has touted one strange-sounding solution after another but none have worked.

- The 'top kill' only killed optimism
- The 'junk shots' were little more than junk.
- And even the long-awaited 'relief well,' set for August, is sparking skepticism.

As the broader market wrestles with BP’s unforeseeable future Scott Nations of NationShares suggests using options to hedge against the horrors and the headlines.

Here’s his suggestion:
Sell June 40/42.5 call spread for $1.40 and $0.60
Collect $0.80

How Scott's BP Trade Makes Money
Break even $40.80
Loses above $40.80
Max profit below $40

Learn more about this trade. Watch the video now!

Options Action: BP
Playing the uncertainty of BP, with Scott Nations, NationShares.




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TRADER DISCLOSURE: ON JUNE 1, 2010, THE FOLLOWING STOCKS AND COMMODITIES MENTIONED OR INTENDED TO BE MENTIONED ON CNBC’S FAST MONEY WERE OWNED BY THE FAST MONEY TRADERS; SEYMOUR OWNS (AAPL), (BAC), (INTC), (MSFT); SCARAMUCCI OWNS (BAC), (C), (GS), (MSFT); SCARAMUCCI OWNS THE U.S. DOLLAR; FINERMAN'S FIRM OWNS (PM); FINERMAN OWNS (AAPL); FINERMAN’S FIRM OWNS (BAC) AND CALLS; FINERMAN’S FIRM (BAC) AND CALLS; FINERMAN OWNS (GOOG); FINERMAN OWNS (GS) CALLS; FINERMAN’S FIRM OWNS (HPQ); FINERMAN OWNS (HPQ); FINERMAN OWNS (IBM); FINERMAN’S FIRM OWNS (IBM; FINERMAN OWNS (JPM); FINERMAN’S FIRM OWNS (JPM) CALLS; FINERMAN OWNS (KFT); FINERMAN OWNS (RIG) OPTIONS; FINERMAN’S FIRM OWNS (RIG) OPTIONS; FINERMAN IS SHORT (IJR); FINERMAN IS SHORT (MDY); FINERMAN IS SHORT (IWM); FINERMAN OWNS S&P 500 PUT; TERRANOVA OWNS (SWN), (GLD), (IPSU), (RSX), (PFE), (TER), (APA), (AXP), (BMO), (BBY), (DIS), (XCO), (AAPL), (CVS), (IPI), (TEVA), (FXB); KELLY OWNS (FXE) CALLS; KELLY OWNS (IBM) CALLS; KELLY OWNS (STD) CALLS; GRASSO OWNS (ABK), (BP), (BAP), (BGP), (C), (DYN), (JPM), (LPX), (NDAQ)

FOR ANTHONY SCARAMUCCI
SKYBRIDGE CAPITAL OWNS (BAC)
SKYBRIDGE CAPITAL OWNS (C)
SKYBRIDGE CAPITAL OWNS (GS)
SKYBRIDGE CAPITAL OWNS (MSFT)
SKYBRIDGE CAPITAL LONG THE U.S. DOLLAR
SCARAMUCCI OWNS (HPQ), SKYBRIDGE OWNS (HPQ)

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 (AMKR)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (IGE)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (DBV)
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 (XLP)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (XLY)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (XLI)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (XLU)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (DRYS)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (ALK)
VIRTUS INVESTMENT PARTNERS OWNS MORE THAN 1% OF (XLK)

FOR BRIAN KELLY
KANUNDRUM CAPITAL IS LONG THE U.S. DOLLAR
KANUNDRUM CAPITAL OWNS (GLD)
KANUNDRUM CAPITAL OWNS (AUY)
KANUNDRUM CAPITAL OWNS (GFI)
KANUNDRUM CAPITAL OWNS (IBM)
KANUNDRUM CAPITAL OWNS (FCX)
KANUNDRUM CAPITAL OWNS (CLF)
KANUNDRUM CAPITAL OWNS (TLT)
KANUNDRUM CAPITAL OWNS (STD)
KANUNDRUM CAPITAL IS SHORT THE EURO
KANUNDRUM CAPITAL IS SHORT THE YEN
KANUNDRUM CAPITAL IS SHORT THE SWISS FRANC
KANUNDRUM CAPITAL IS SHORT (EXPE)
KANUNDRUM CAPITAL IS SHORT (SU)
KANUNDRUM CAPITAL IS SHORT (IOC)
KANUNDRUM CAPITAL IS SHORT (XLI)

FOR STEVE GRASSO
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (AMR)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (BAX)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (CUBA)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (DHR)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (DYN)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (GERN)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (HSPO)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (MERC)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (NWS.A)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (NYX)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (PDE)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (PFE)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (PRST)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (RDC)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (SYMC)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (TLM)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (TRV)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (XRX)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (SDS)
STUART FRANKEL & CO. INC. AND ITS PARTNERS OWN (TBT)
STUART FRANKEL & CO. INC. AND ITS PARTNERS ARE SHORT (QQQQ)

FOR NIAMH ALEXANDER
KEEFE BRUYETTE & WOODS MAKES A MARKET IN (NDAQ)



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