The Traderszone Network

Equity option activity on the CBOE saw 1,194,387 call contracts traded on Wednesday, compared to 925,811 put contracts. The put/call ratio rose to 0.78, while the 21-day moving average slipped to 0.76. Gold futures have reached their highest price in 7 months as uncertainty over the bailout plan jump-started a new round of safe-haven buying. The April contract piled on $30.30, or 3.3%, to finish at $944.50 per ounce, while the front-month February contract gained $30.10 to settle at $943.80 per ounce.

Overseas trading has been dismal. Stocks plunged in Tokyo and Hong Kong with exporters and financials leading the downtrend. Strength in the Japanese yen helped pressure a number of companies. In addition, Japan’s wholesale inflation rate fell more than expected in January, dipping into negative territory for the first time in more than 5 years. In Europe, indices racked up their third day of losses as falling oil prices hold back the energy sector and corporate earnings create additional drag on stocks.

Against this backdrop, we again feel that the Direxion Shares Financial BEAR 3x ETF (FAZ) 09 MAR 65.0 covered calls continue to look interesting. They are currently up +4.93 to 48.48 and offer a 174.6% if unchanged annual return and a 585.5% if assigned annual return.