CHINA Bailout 1/5th GDP - STOCKS

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post #1 of 4

11/10/08 at 9:29am

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mjoke
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China release a econ stim equivalent to 1/5th of their GDP.
Needless to say this is causing stocks related to china to jump.

The form of spending will be conducted by the government until 2010 and benefit construction, steel, railway basic commodities .. etc..

Not sure what stocks to pick but here are a few
ACH
CCTC
GETC
CHNG
CPSL

Ive been considering picking up ACH..this just decided for me.

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post #2 of 4

11/10/08 at 10:49am

Blooey
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How would you play options on stocks that gap up hard? The premium on calls will be hugely inflated, won't they? I notice Rossi often plays options on gappers, but I'm too afraid to get caught overpaying, so I generally stay away. How are these played for profit?

post #3 of 4

11/10/08 at 11:30am

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He probably plays the opposite side of the gap...I mean...that's what I would do.

The big gap up would cause the PUTS to get out of whack due to volatility and they would be undervalued on the BID if you were able to land some right off the bat if the stock pushes up just a little more before it crashes back down on the pullback.

If you look at my tracker near the top you'll see GS 471% gainer...That was when it gapped up like $30 one morning and I bought $1000 worth of PUTS at the BID...tried to get $5000 worth but it didn't fill me