posted on Aug, 28 2007 @ 02:31 PM
Xenya, shouldn't be that hard to do. If you already have a trading account you'd probably have to apply for options trading. I'd recommend staying
away from setting up a "margin" account, but that's just my own preference. I use a service called sharebuilder, I have what's called Level 2
options trading meaning I can buy and sell calls and puts (I'd thought I could only buy calls but once again I was wrong i can buy/sell calls, write
calls and "unwind" not 100% sure what that is but i can do it.) Price per options trade is $10.95 +$.75 per contract on premium and in the $15 +$1
per contract on the standard plan. As far as how much each option contract costs find the SPY on yahoo look at the ask price under puts multiply that
by 100 and that is the per contract price on the option. I recomend using a limit order so you can maybe get a better price than the ask price during
the day. (when you use a market order it's usually gonna go at the ask price.) For example a single put option at 120 strike on the spy (would be S&P
hitting 1,200) would cost me around $33 bucks. If the S&P doesn't hit 1,200 it's worthless after the 21st. But if the market starts to tank you
could sell it for a gain before then, just make sure it's still a gain after you take into account your transaction costs. Make sure this is money
you can afford to lose before you place that bet!!!! I'm thinking about it myself but I think i'm gonna wait until an up day to buy my first put.
Behindthescenes, I think that is a pretty good theory as well. The fed may be in a catch 22 on rate cuts where it's better to do nothing than
something. If they cut the dollar could crash if they raise the market will crash (not to mention even more foreclosures in next 6 months). If they do
nothing the market will fall but i doubt by 30%.