Potash (POT, $74.94, down $1.76) took a sudden nosedive after hitting a high of $81.49 earlier this morning and opening up at $79.75. There is no news and the stock has gotten so volatile that we could probably do a straddle option trade with the March 75 strike prices.

However, I have the April 100 calls (PYPDT, $1.70, down $0.80) on my Watch List and they are under $2 as we head to lunch. This was my target entry price but I’m only doing a half position here at these levels. So if you normally buy 10 contracts, buy 5. The calls have traded as high as $3.20 this morning which is slightly lower than a 100% return from a $3.40 exit.

With the market acting the way it is, set initial exit points at $2.55 which is a 50% return. Hopefully we can get in and get out of them before the weekend gets here.

Rick Rouse