Keys to a Rebound

Cramer thinks Cisco -- specifically its upcoming quarterly results -- could play a key role in any snapback rally.
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Jeff calls in from

Playland

or whatever theme park he's got up there in Westchester County, and the topic is how to play

Cisco

(CSCO) - Get Report

. Jeff wants no more common bought and instead figures that we play it with calls.

Sounds good to me.

What's amazing is that we don't talk about puts. Maybe we've come down too far too fast and it seems a little unworldly, but we both feel that Cisco could play a key role here. If Cisco talks a good game and does a good quarter, we could get a snapback. If Cisco can't motivate the troops, we are out the calls.

Sometimes you have to do what hurts most. Nothing hurt more than buying that Cisco. It went down so fast after I bought the common that the relative loss in the August 60 calls -- a quarter-point after I bought them -- seems downright benign.

Warning: Expect to lose everything if you buy these. I regard this contract as an insurance plan to help me if the market ramps while I am very underinvested.

Random musings:

Jeff tells me his kid is the one going on the rides but that he's the one who's nauseous.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Cisco. 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

jjcletters@thestreet.com.