Monday, August 07, 2006

Taking cover

Volume just about all dried up today. Only 2 billion shares were traded on the NYSC, 1.4 billion on the Nasdaq. I picked up 20 contracts of SPY October 125 puts at $2.05. After adding to my PM positions last week, I felt a need to add a little protection but have always had trouble hedging them directly. So I'm back to my old trick of cross hedging using general indices. In my judgement, the probability of the general market taking off without PMs remains quite small (again, this is not investment advice).

The geopolitical landscape of the day is dominated by the crisis in the Middle East. This article which I found via 321gold was an excellent read, if a little chilling. It certainly made me wanting to load up on a bunch of energy stocks!