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Our Favorite Low Risk / High Risk Trades for 2010

Unlike so many market mavens who talk the talk – the Fast Money traders actually walk the walk. As you can see from the bottom of this post – they’re invested in this market.

And as investors themselves, they know sometimes you’re looking for a high risk and high reward play. Other times they know you’re willing to sacrifice returns for a play that presents somewhat less risk.

Here’s what they suggest into 2010:

Guy Adami
Lower Risk: Long Hewlett-Packard (HPQ)
Higher Risk: Short RIM (RIMM)

Symbol
Price
 
Change
%Change
HPQ
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I love the valuation of Hewlett-Packard, exclaims the Negotiator, and I’m not concerned about competition from Dell. Also I think CEO Mark Hurd is doing a great job.

Symbol
Price
 
Change
%Change
BB
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Shorting RIM is an aggressive trade but it has worked and I think it continues to work, says Adami. I expect the company to have trouble with margins in 2010.

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Karen Finerman
Lower risk: Long Walmart (WMT)
Higher Risk: Long Golar (GLNG)

Symbol
Price
 
Change
%Change
WMT
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Did my Walmart trade shock you, the Chairwoman chuckles! I don’t think the stock will be up 50% but I do think it will do nicely in either an improving economy or a weak economy.

Golar is a liquefied natural gas trade, explains Finerman. What I really like about this stock is that they have locked in long-term contracts and they also make money off the spot market. I think the market dynamic is shifting and day rates move up.

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Pete Najarian
Lower risk : Long Johnson & Johnson (JNJ)
Higher risk: Medivation (MDVN)

Symbol
Price
 
Change
%Change
JNJ
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I’m bullish JNJ for its dividend yield, explains the Pit Boss, as well as its P/E and the fact that Warren Buffett is in this name. Also JNJ stuck with their strategy with growth by acquisition – but acquisitions under $5 billion.

Medivation has had strong results with its Alzheimer’s drug, says Najarian. If the drug makes it to market, it could be a blockbuster.

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Tim Seymour
Lower risk: Long ag and fertilizer names; Potash (POT), PowerShares DB Agriculture Fund (DBA), Sociedad Quimica y Minera (SQM), Intrepid Potash (IPI), Cosan (CZZ)
Higher risk: Long nat gas (UNG)

Symbol
Price
 
Change
%Change
BFRE
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I’m bullish ag because farmers can only delay fertilizer use but not avert it, explains the Ambassador. Don’t forget 18 months ago we were in a panic about needing more food for the emerging middle class. As the globe recovers I think demand for food surges.

Symbol
Price
 
Change
%Change
PCFO
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The nat gas trade needs the dollar to remain weak for this trade to work, reveals Seymour. But I do think there’s a political motivation to get more companies to use nat gas. I can see the UNG moving to $30 if that happens.


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Trader disclosure: On Dec. 23rd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Finerman Owns (GLNG); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (MSFT), (WMT), (GLNG); Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (BAC), (EEM), (INTC), (POT); Najarian Owns (MS) & Short (MS) Calls; Najarian Owns (MGM); Najarian Owns (HK) Call Spread

For Brian Nagel
Oppenheimer & Co. Inc. makes a market in the securities of (BBBY)


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