Halftime Report: Citi - If Gov’t Is Selling, Should You Be Buying?

Buzz on the Street suggests the government is going to off-load some of its big stake in Citi after the lock-up expires.

If the government’s selling, should you be buying?

Strategy Session with the Fast Money Traders

I’m seeing lots of buy-side interest, says Steve Grasso of Stuart Frankel. Soros is buying, Pauslon is buying and other Wall Street whales are buying, he reveals. That’s positive for the bulls. Also Citi's Tier 1 capital is at its best ratio in years, he says. That too, is bullish.

It’s important to note that the government isn’t looking to dump all of their stock at once, explains host Melissa Lee. Just some of their position and at the market prices. But is that a reason to buy Citi at $3.80?

It think so, replies Pete Najarian. Options investors are buying calls in Citi, he explains. I'm seeing a lot of activity in the March 4 and April 4 calls. My interpretation is that the options market is expecting Citi shares to go much higher.

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BARCLAYS CHATTER

After buying up Lehman 's North American operations at the peak of the financial crisis, British bank Barclays is on the prowl for another major acquisition in the U.S, writes the WSJ.

What must you know?

The billion dollar question is, who are they going to pick up and I think it’s likely a regional bank, says Patty Edwards of Storehouse.

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CHART OF THE DAY: VOLUME DRYING UP

The traders are closely watching the volume on the NYSE and all the major exchanges on Tuesday.

What must you know?

Volume as a whole has really cascaded lower, explains Steve Grasso. That suggests to me fund managers are very confused.

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CISCO TRADERS TAKE PROFITS ON ANNOUNCEMENT

The traders are closely watching the action in Cisco Tuesday after the technology titan introduced a router that it says can handle 12 times the Internet traffic of the nearest competing product.

What’s the trade?

I'd look at downstream trades, counsels OptionMonster Jon Najarian. I think beneficiaries of the Cisco development could include Apple , Netflix and Google. I'd focus on all three of these names.

I’m watching QLogic , adds Pete Najarian. Options action suggests, they too, may be a beneficiary. And I also like Akamai .

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TOPPING THE TAPE: FAST FOOD

Shares of Burger King traded higher on Tuesday despite expectations of lower third-quarter revenue and restaurant margins in the United States and Canada after bad weather in the Central and Eastern United States kept diners away.

What’s going on?

Cheesecake Factory was downgraded on Tuesday and I think the strength in Burger King may be investors betting on the trade down, says Patty Edwards.

And investors are playing laggards in the group, adds Steve Grasso. Burger King as well as Sonic are the laggards and investors are looking for them to catch up.

If you want to play fast food, I’d do it with a long position with McDonalds , says Mike Gurka of Empower.

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TAKE YOUR POSITION: MALL STOCKS

With results from J Crew out after the bell on Tuesday and other retailers to follow later in the week, how should you game the space?

Retail Earnings Calendar

Tuesday: J. Crew
Wednesday: American Eagle / Children's Place / Hot Topic
Thursday: The Buckle / Aeropostale
Friday: Ann Taylor

What’s the trade?

I’m bullish on JCrew , says Patty Edwards. And I’d also be long Aeropostale.

I like the Buckle , adds Pete Najarian.

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CALL THE CLOSE

Steve Grasso: I’m a buyer of the market and Visa .

Patty Edwards: I’d get long Aeropostale

Mike Gurka: I’m a buyer of the S&P above 1144

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Trader disclosure: On March 9th, 2010, 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), (GS), (INTC), (MSFT), (NUE), BTU); Pete Najarian Owns (BAC) Call Spread; Pete Najarian Owns (CMC) Calls; Pete Najarian Owns (ENER) Bonds; Pete Najarian Owns (INTC) Calls; Pete Najarian Owns (MCD) Call Spread; Pete Najarian Owns (QLGC) Calls; Pete Najarian Owns (C) Calls; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (USO); Finerman's Firm Owns (WMT), (YUM); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (GGP); Finerman's Firm And Finerman Own (GOOG); Finerman's Firm And Finerman Own (WFC) Prefered; Terranova Owns (GLD) March Puts; Terranova Is Short (XLY); Terranova Owns (AAPL), (EMC), (DELL), (MSFT), (GOOG); Kelly Owns (ELX) Calls; Kelly Owns (AMZN) Calls; Kelly Owns (QLGC) Calls; Edwards Owns (GLD) For Clients; Edwards Owns (GS) For Clients; Edwards Owns (INTC) For Clients; Edwards Owns (MCD) For Clients; Edwards Owns (WFC) For Clients; Edwards Owns (SPY) For Clients; Edwards Owns (QQQQ) For Clients; Jon Najarian Owns (CSCO), Is Short (CSCO) Calls; Jon Najarian Owns (AAPL), Is Short (AAPL) Calls; Jon Najarian Owns (GOOG), Is Short (GOOG) Calls; Najarian Owns (BAC) Call Spread; Najarian Owns (C) Calls; Najarian Owns (F) Calls; Najarian Owns (INTC) Calls; Najarian Owns (MCD) Call Spread

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