Profit from Stocks’ Slide with These 3 Put Options
Aug 26th, 2008 | By Adam Lass | Category: Featured, Financial NewsWashington has found a way to prevent two of the largest financial institutions in the world, Fannie Mae (FNM) and Freddie Mac (FRE) from destroying what’s left of the U.S. economy.
Rather then allow these doddering giants to default on their bonds, they propose screwing every single shareholder in these “semi-public” corporations out of every single penny of their supposedly fail-safe investments.
Thud.
In Jackson Hole, Wyoming, the world’s central bankers, including such luminaries as our own Ben Bernanke, Europe’s Jean Claude Trichet, and Bank of Israel’s Stanley Fischer, are still arguing as to how to begin to prevent a collapse that has been building for the better part of the past decade.
Apparently, the tiff over whether a central banker should toady up to failing stock houses grew so heated, one participant suggested that the grey men needed hosing down with fire extinguishers. “They are taking away the keys to the Maserati,” complained ex-Bush adviser Pippa Malgren. “This is going to dramatically change the financial landscape.”
Thud.
No shock then that investors are sidling away from the market in general, and the financials particular, as quickly as they can manage. As I sit to write, the S&P 100 (OEX) is down some 1.6% on the day. The S&P Financial SPDR (AMEX:XLF) is at the bottom at that barrel, with losses of some 2.42%.
This drop is, well, a drop in the bucket, as it were – a mere downside twitch in the financials’ long downward progression. So far in 2007 and 2008, WOW subscribers have seen gains in excess of 1110% on puts against this horrid slide.
But that slide is nowhere near finished. Daily, another domino in the long chain reaction tips over, crushing its neighbor as well as any and all onlookers.
Bang!
WOW’s model portfolio is currently holding puts against MetLife (NYSE:MET), Bank of America (NYSE:BAC) and Capital One (NYSE:COF). All three may offer further triple-digit gains to those with the wisdom and foresight to see this horrid chain reaction through to its end.
Source: Central Bankers Seek Stability in Jackson Hole
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