Risky Business

Betting on beaten-up exchanges carries great risk but the rewards could also be substantial.

High-beta exchange stocks could rise sharply if the market makes a turn for the better, however they could fall just as sharply if the market turns for the worse.

In high-beta stocks, explains Karen Finerman, for every 1 point move in the S&P you get a larger point move (either up or down) in the stock. For example in NYX for every 1 point move in the larger index NYX stock should move a little more than 1.5 points

Exchange Beta

NYSE (NYX) 1.52
Nasdaq (NDAQ) 1.37
CME Group (CME) 1.23
NYMEX (NMX) 1.21

Source: Reuters

Traders, what do you think?

I think that the NYSE is the most compelling name on this list, says Jeff Macke.

I’m also a fan of NYX, adds Guy Adami.

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Trader disclosure: On June 2, 2008, 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 (INTC), (DIS), (MSFT), (WMT); Adami Owns (C), (AGU), (BTU), (NUE), (GS), (INTC), (MSFT); Finerman Owns (GS), (AAPL); Finerman's Firm Owns (GE), (MSFT), (NYX), (SBUX), (SUN), (TSO), (VLO); Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM); Finerman's Firm Owns SPX Index Puts; Finerman's Firm And Finerman Own (C) And (C) Leaps; Jon Najarian Owns A Call Spread In (HOC), (MEE), (SBUX), (TSO), (VLO), (AAPL), (COP), (FTO); Jon Najarian Owns (ACI) Call Spreads And Calls; Jon Najarian Owns (ANR) Calls Spreads And Calls; Jon Najarian Owns (C) Preferred Shares; Jon Najarian Owns (KEY) Puts, (LEH) Puts; Jon Najarian Owns (SNM); GE Is The Parent Company Of CNBC; NBC Universal Is The Parent Company Of CNBC