Yes I'm buying the 18 Feb series and they are deep-in-the-money, if you consider $3 deep.
I want some insurance over this 6 week period and the options pretty much trade very close to parity on the underlying (meaning your not paying very much for time premium).
So I bought these this morning at 3.35 each. I believe we get a move back into the 28-day EMA on this instrument or 24.33 so roughly a 35% return.
Choose the strike that suits your own style/risk tolerances. In any case, I think a setback is dead-ahead for the markets.
Take a look at the QID 18 Feb 10 Calls - remember this is a Proshares Ultra Short QQQ. They are lottery ticket sized (i.e. in the $1 region). So buying these you are expecting the QQQQ to turnaround from this area.
Place a small bet on the market reversal with these. I think you make some serious trading $ over this period. But be prepared, as always to lose it all!
You might think about putting those Puts back out on CRM tomorrow depending on the market leanings out of the Jobs report. I think you could see 124 on CRM by the time of expiration!
In my opinion, no matter what is reported the market is headed down short-term - too much certainty priced in now!
Honestly, most retail investors are whistling by the graveyard. Today I purchased some 2012 Jan $80 puts on OPEN (and am down %6.25 already lol) and am looking to close out most of my NFLX positions to move them into 12/13's. I've put a bit down on VIX calls and will add to them over the next few weeks. I'm betting on VIX over SPY since the moves can be so much more volatile (and thus more profitable). Still I may hop in and short SPY directly - I just think there are more pigs out there that are so bloated they will pop spectacularly like pinatas at a Quinceañera...
I would like to add one more log on the correction fire looming.
I've been watch the FXE - CurrencyShares Euro Trust relationship to the market via the SPY.
What I'm seeing is a similar pattern to what existed from Dec '09 thru Jan '10. The index has fallen off recent highs (Nov '10) has consolidated (Dec '10-Jan '10) and appears to be getting ready for further weakness/plunge thru the consolidation zone. The indicators are following the exact same pattern as last year.
So last year the market (SPY) experienced a break from the then highs of 114.54 to drop to 104.40 or 8.8% breakdown/correction.
A similar move now off 127.83 would put us back at 116.51 very close to the Nov correction point.
If you are a fan of zerohedge.com like I am, much of this has been discussed to a great length. The ADP numbers were totally bogus - as are pretty much any other employment numbers.
I agree with you - the pomo pump is distorting the markets like crazy, but I don't think this will go on for much longer. Once I close out my March and July positions I'll buy 2012/13 puts in NFLX/OPEN/PCLN, and roll the rest on shorting the VIX. Gives me enough time to sit back and watch the fireworks. I really think this could be *the* year for us shorties.