OptionsVest

While most of us in the United States were eating turkey and watching football over the Thanksgiving holiday, there was a little credit crisis going on overseas in Dubai. While that rocked financial markets around the world for a couple of days, stocks bounced back some on Monday.

Once again bad news is not really slowing down the stock market’s bull run. Investors are still using every pullback as an opportunity to add to their long positions. Savvy traders are using options to take advantage of this situation by structuring trades that reduce their risk in case this little credit crisis turns into another big event. You might want to take this approach yourself, by considering a Bull Call Spread or a Bull Call Diagonal Spread.

JD