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If you're inclined to start dipping into some names where the market decline has pushed prices too low, one approach to take is to look for U.S. stocks that have high exposure to sales in emerging markets. Cramer and Stephanie are long YUM for this reason in the Action Alerts Plus portfolio, and I will gain exposure with this options strategy.
It may take some time for investors to be reassured with choppy markets, and it's probably best to trade a little lighter until things look more normal - the opportunities won't disappear overnight. In the mean time, here are some things worth reading:
Options seem to be priced at a relative discount, which is not a positive sign for shareholders.
These days, every market watcher has an indicator to show you, some chart pattern or statistical threshold that predicted four of the last five market turns and just so happens to be flashing a warning sign right now.
After a year where equity call buyers could do no wrong, it would not be surprising to see some quarters where the only winners are gamma shorts, where the straddle jockeys and condor sellers and pickers-up of steamroller-threatened nickels are rewarded for taking risks.
The fundamental picture and working knowledge of the futures markets does matter to smaller investors.
This trade sells short-term puts to partially finance the purchase of longer-dated puts.
Futures and options traders both trade calendar spreads, but the phrase has a different meaning depending on which type of derivative you're using.
Every investor that makes decisions using fundamental or technical analysis is implicitly rejecting some form of this.
Several indicators suggest a more bearish outlook for the months ahead.