The Dow opened with a quick 150-point loss and that nearly doubled as the index hit a low of 7,560 earlier in the session. We are currently at a 240 point loss and with the Dow right at 7,600 the November lows could come into play this week. That was almost a given and you can thank the European banks for today’s weakness.

We were stopped out of the Akamai Technologies (AKAM, $17.15, down $0.57) March 17.50 calls (UMUCW, $1.10, down $0.35) at $1.10 this morning. No need in fighting the market. Bank of America (BAC, $5.14, down $0.44) is getting whacked and Wal-Mart (WMT, $48.00, up $1.47) beat estimates.

Wal-Mart held support and I had mentioned the March 42.50 puts (WMTOV, $0.50, down $0.35) in last night’s Weekly Wrap. I would still stay away from these options but if Wal-Mart resumes in downtrend later in the week, these put options could get a little pop. You could do a half position here with exit points at 75 cents and stops at 25 cents if you really want to roll the dice.

The one bright spot continues to be gold and yes, we have our finger in that pie. The Spider Gold Shares (GLD, $95.41, up $2.86) are rallying 3% as gold is up another $30 an ounce this morning to $970.

The March 99 calls (GLDCU, $3.00, up $0.95) are up 45% and the March 100 calls (GLDCV, $2.70, up $0.90) are up 50%. Take note of the huge moves in the options with just a 3% move in the stock. Incredible.

We have been in the Spider trade for a couple of weeks now and today’s gains are hard to ignore. You could take half off the table here and set tight stops with the rest of your position to lock in gains. You would still participate in the move higher with the other half of your position.

Rick Rouse
Rick@OptionsMentoring.com