Listen for the drop

Ya, SHLD stock dropped 15%, but that’s not a reason to expect the worst.  When the majority of the bears and bulls realize that another possible rate cut of 25 points will mean eventually devalue the dollar more, causing lots of “yuckiness” (that’s a real term, really).  I took positions a little early this morning, let’s see what happens…

I am looking for BIDU to run up a bit and then come down, so I picked up one put which I expect to make money on by tomorrow, but will watch carefully and bail if I start losing too much on it.

I’m pretty short on additional funds, or I would be a buyer of SHLD!  That’s right, a buyer.  I still might pick up a deep, deep, deep call.  The pricing is pretty nice right now.  This is a stock that touched the $195 levels less than a year ago, that shows that there’s potential for movement on this stock, and SHLD isn’t going anywhere.  Remember that whatever the SHLD news is about earnings, they made $11.5 billion dollars in the 3rd quarter.  Margins on that fell to 27.4% from 28.3%.  Hello?  That isn’t a reason to drop the stock like it was.

Well, I just figured that better to act now than later, so I made my trades for today.. ready?

Bought:
BIDU Dec07 $370 put (BPJXN), 1 @ $25.40
  stock price entered $375.80
SHLD Mar08 $150 (KTQCU), 2 @ $1.15
  stock price entered $99.95

The Russell is taking a little hit today, nothing major yet.  I still believe my IWM is a good position so I’ll keep it for now. 

One last thing.  Watch for some unexpected drop in BIDU.  I know that I will.