No.1 - Sharp Drop Ahead?

With the Dow only 50 points shy of the magical 14,000 - a sense of euphoria has swept The Street, or has it? According to Bloomberg News, the “put-call ratio” - a key options reading that measures investor fear - has reached its highest level in 12 years! As traders begin to sweat, which stocks should you be buying?

Karen Finerman says she’s a put buyer and today bought September 1515 puts on the S&P as well as some Russell puts to hedge her portfolio. However, she adds that she doesn’t see a sharp drop coming.

Pete Najarian thinks that investors are smart and protecting their portfolios. He doesn’t view this put buying as bearish.

Jeff Macke agrees and says options are cheap and they’re being bought for protection.

Eric Bolling says it’s a bullish play. He also feels the data is being misinterpreted.

Karen tells the panel if she was bearish she’d sell her stocks, not buy the puts.

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Trader disclosure: On July 16th 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 (ATVI), Bolling Owns (DIS), (ICE), (MPEL), (NMX), (T), (XOM), Corn; Bolling Is Short (FXI) And Owns (FXI) Puts; Finerman's Firm And Finerman Own (C ) (FTWR); Finerman's Firm Owns (KFT); (MO); (GLNG); S&P Puts; Russell 2000 Puts; (TGT) Calls, Finerman's Firm Is Short (IYR)