When one of the top 10 stocks that moves the index of Dow Jones was being downgraded or kept being flushed into toilet with not-so-good news, you can expect the overall stock markets to be volatile. Coupled with bearish sentiments, you just can’t beat the bear no matter how slow it moves around. This is not the time to play Call Options especially the stocks which are due to announce its earnings. Yous stocks might announce flying color results but it won’t last.
Instead if you’re damn sure a particular stock’s earning is doomed your chances of making money playing Put Option could have multiply by now. Chances are great that the stocks which you do not have much confidence in the first place could potentially make you tons of money since it’s swimming along the course. Goldman Sachs downgrade Citigroup Inc. by betting the bank would have to write down $15 billion due to its exposure to risky debt over the next two quarters.
Stocks have fallen in six of the last eight sessions and it appears the trend will continue. At one point, Dow plunges to minus 200 points, well below the psychological 13,000 points. Hence it’s important to watch this level as bull and bear are at the opposite sites waving at you. No matter what, the Asian stocks will definitely say hello to the bear when stocks markets open its trading on Tuesday tomorrow. At time such as this, sometimes you just got to stay neutral and wait for a clearer signal, or try to scalp some Put positions if your favorite stocks demonstrate such opportunities.