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Wednesday's Celebrity Stock Trade

I like to have a little fun. I’ve created my own stock market trading celebrities. Sometimes I go long Kate Middleton (quit complaining, Duchess, you look fantastic). Sometimes I want to liquidate Randy Travis and hope for an entry point somewhere down the road.

Lindsay Lohan
Michael Stewart | WireImage | Getty Images
Lindsay Lohan

On Wednesday, there's only one trade to make: Lindsay Lohan.

How to trade the troubled starlet after she was arrested on hit and run charges in Manhattan? For one thing, is she still a starlet? When does she become an out of work actor?

I see several investment options here:

PAIRS TRADE: LOHAN AND SLOWHAND

This trading idea originated with @AClayman60. Increase short positions on Lindsay Lohan, but go long Eric Clapton. The rock star’s taste in art is paying off handsomely. "Slowhand" is scheduled to auction off a Gerhard Richter painting he owns for $14-$19 million, several times what he paid for it in 2001. LiLo versus Layla? No contest.

LILO V. LA-LA LAND

As long as Lohan is out of Los Angeles, La-La land is a safer investment. Consider a short term buy until she returns home.

PAIRS TRADE PLUS HIGH FREQUENCY ALERT

Go long Amanda Bynes, who is now being forced to take a cab since her car has been impounded, and her parents are reportedly moving back to California to take care of her. Short Lohan, whose parents are a part of the problem. And keep an eye out for "an HFT Pedestrian Flash Crash." (This idea courtesy @santellishand.)

STRANGLE TRADE

A neutral options strategy would be a strangle position on Lohan, who may continue to trade sideways for the foreseeable future. This from @RichWalls, who also tweeted that news about Lohan, "Makes me want to strangle myself."

INVEST IN NUT FUTURES

From a commodities perspective, a nut play might involve shorting Lohan, going long Joaquin Phoenix. Turns out Phoenix was only pretending to be crazy during his fake rap career. This trading idea came from @bobfasbender.

POSITION FOR NORMAL BACKWARDATION

For sophisticated traders, it’s not looking like Lohan's futures price will hit expected levels upon expiration.

—By CNBC's Jane Wells
@janewells

Questions? Comments? Funny Stories? Email funnybusiness@cnbc.com

  • Based in Los Angeles, Jane Wells is a CNBC business news reporter and also writes the Funny Business blog for CNBC.com.

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