Yahoo had an article about the possiblity of the housing showing a possible bottom. Therefore the financials that have been hit hard are due for a move up. Very logical thinking if the premise of the housing bubble has indeed hit bottom. I do not think so myself. We still have March with the largest ARM resets ahead of us. However, many times stocks are ahead of reality and just maybe the financials after being hit so hard are indeed ready to rally.
My point of all of this is that if you like to bottom fish, puts can be an excellent way to do this. If you feel that companies such as Citigroup are much to large for our government to let collapse, then you have an idea that they will be around and you will want to be involved some how.
Selling puts can generate income while the stocks languishes trying to find a bottom. Now many will say yes but if the stock still drops, then I am losing money. While this is true, it is not realized loss until you close out the trade. I am not trying to be flippant here, just that you can always buy back and sell the next month (rolling) until the stock eventually rises and the put is worthless.
Later
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