Strangling The Spider


Up 100 - down 180, then up again. That’s basically the market of late. But no matter where the market goes - volatility can net you some fast money, if you know your options.

Pete Najarian explains that volatility doesn’t just last one day. It usually plays out in 3 – 4 weeks of time.

He says if investors believe the market still has a lot of movement ahead, buy the S&P 500 Index Spider (SPY) 149 puts which cost $2.20.

That’s a bet that the S&P will drop below 149 between now and the third Friday in July, explains Dylan Ratigan.

And, another trade says Pete, is to buy the 151 call which is a bet the S&P moves above 151.

Dylan adds: this trade is called strangling the spider.

S&P 500

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Trader disclosure: On June 26 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:
Macke Owns (SWY); Najarian Owns (.VIX); Bolling Owns (BP), (T); Bolling Is Short S&P Futures
Bolling Is Short Nasdaq Futures; CNBC Is A Service Of NBC Universal And Dow Jones