11:45 am (EST)

Toyota Motors (TM, $73.06, down $0.61) looks like it could be headed below $70 and I like the April 70 puts (TMPW, $1.35, down $0.05) here at these levels for a quick one or two day trade. I would not pay more than $1.40-$1.45 for the puts and I’m looking to get out around $2.00.

If you get in the trade, place stops at $1.00.

The Dow has been in the red all morning (currently down 166 to 7,812) as Wall Street anxiously awaits Alcoa’s (AA, $7.75, down $0.16) earnings after the bell. The demand for aluminum has been weak due to the decline of auto sales so I’m hoping Toyota sinks with the Alcoa report for the rest of the week.

The April options expire next week and this trade will be closed by Thursday, regardless.

Rick Rouse