Market Midterms: Hedging


Your friends at “Fast Money” want to remind you to practice proper neck health. Yes, neck health. Why? Because if you’re an avid market watcher you’re at risk of getting whiplash.

In the first half of this year the Fed went from lowering rates to thinking about raising them. Oil fell to $86 before rebounding to nearly $140. Investors cheered the biggest tech merger ever before it completely fell apart. And the dollar dived, rebounded, and began diving again.

So you see, in this market, proper neck health is very important. Especially since we expect more of the same in the second half.

Already, OPEC says we may get $170 oil this summer before crude turns lower by the end of the year. And Goldman Sachs predicts Citigroup's dividend may again be in danger.

What? You already know that? Well, here's something you don't know, the Fast Money way to smooth out the ride.

I think you should always be hedged, says Karen Finerman. I try to use ETFs and then options on ETFs.

I also watch the VIX closely and trade the volatiliyt. Right now volatility is nowhere near where it had been earlier in the year. If the VIX spikes into the 30’s that’s the time when you can buy stocks on a panic – and at a discount to their fundamental value. But not before.

Read More:

> Market Midterms: Healthcare
> Market Midterms: Housing

> Market Midterms: The Economy

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Trader disclosure: On June 27, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (BTU), (NUE), (GS), (INTC), (MSFT); Pete Najarian Owns (ANR), (TSO), (XLF); Pete Najarian Owns (AAPL) Calls, (EK) Calls, (QID) Calls, (RIMM) Calls, (YHOO) Calls, (WLT) Calls; Pete Najarian Owns (HRB) Puts, (MER) Puts, (HBC) Puts; Finerman Owns (GS); Finerman's Firm Owns (MSFT), (NYX), (SUN), (TSO), (MRK), (PPH); Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm Is Short (SPY), (IYR), (IJR), (MDY), (IWM); Finerman's Firm Is Short SPX Index Puts; Finerman's Firm Owns (VLO) And (VLO) Call Spreads; Terranova Owns (BNI), (CME), (FXC), (LUV), (GOOG), (FCX), (INTC), (IYT), (XLF), (SU), (YHOO); Terranova Owns Dollar Index Futures

Terranova is chief alternatives strategist at Phoenix Investment Partners;; Phoenix Investment Partners Ltd. Owns (RWX), (DBC), (DBV), (IGE), (AAI), (ALK), (AMR,) (APA), BP plc, British Airways plc, (CHK), (CVX), (COP), (CAL), (DAL), ENI SPA, (XOM), Gazprom, (HA), (HES), (HOC), (HSE), (JBLU), Lukoil, (MRO), (MUR), (OXY), Petrobras Intl Fin, Petro-Canada, (PBR), Petroleos De Venezuela, (QAN), (RJET), Royal Dutch Shell plc A Shares, (SKYW), (LUV,) (SU), (TSO), Texaco Capital, Total SA, (UAUA), (LCC), (VLO)