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In the height of yesterday's ugliness, I figured these banks could see some more downside if

First Union


wasn't the only moron out there who blew this business environment. I love



-- I mean, it's been a huge winner since the October lows -- but, heck, this isn't a religion. I'm willing to profit if I think the big bank is rolling over.

So, when the stock is at 74, I check the chart, and support (whatever that is) is shot to #^$% and this thing looks like it is making a beeline for 70.

Immediately I price out the June 70 puts, thinking this may be one cheap insurance plan. Spend a buck or less and get to win twice: buying Chase on a dip with a stopout, or profiting if it or its brethren get downgraded Wednesday off the First Union debacle.

That's where the tough part comes in. Having traded options for two decades, I've developed a pretty good sense of what makes sense, or at least what gives you a fair chance to make a buck.

It certainly wasn't these puts. You had to pay about two bucks apiece for them. That means they were priced for the stock to drop 6 to 68. That's a bad bet to me. When I buy out-of-the-money puts after a prolonged decline like the one Chase has had, I don't want to pay north of a buck. At two bucks, I would definitely miss the money if Chase didn't collapse. That's like pricing insurance at a deductible that doesn't make it worth having even if you have a serious collision.

That's what makes this period so right for cash and not shorting. The risks of a snapback rally, which are always great, make just this kind of put-shopping exercise worthwhile. But the pricing of the puts is simply absurd.

Until premiums come in, this kind of insurance simply isn't worth having. And unless you think that the correction is only one-third done, you can't make much money betting on out-of-the-money puts for profit right now.

Random musings:

Take a look at

Gary B. Smith's

charts this morning -- some really hurting cowboys. Yet, in his

chat last night, he mentioned that not much seems shortable right now. That's kind of how I feel. Short term, I am more bullish than

Helene Meisler

, and I'm more inclined to bottom-fish and less inclined to short stocks because of the extreme negative sentiment. I find that looking at charts like these helps me clarify my thoughts immensely, and I recommend it to even the most fundamentally driven of you out there.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at