Highly levered nat gas play. Either a triple or a zero from here.

I saw it hit a 3 handle today, well into it's 3 year lows, no support at the moment.

I sold a bunch of July 4 and July 5 puts on it today. IV at 180%! Worse things could happen than getting a bunch of stock put to me at a basis in the low 3s.

Ram, I've used a similar strategy for stocks I wouldn't mind owning, and if the price moves against me I would sell some calls to lower the basis further. One thing I wonder about: I've noticed that low 'price' stocks (ie. $1/share or less) never seem to have options. If a stock declines to a certain point, is there some regulation that prevents options from being written, or is it just lack of market interest? Why can't there be a .50 strike option on a .40 stock, in other words?

Hiphop: There are volume, market cap, and shares of float outstanding based limits on options markets. Also, there are generally not options markets available for OTC or Pink Sheet stocks. Finally, to have an options market in a particular company, some floor trader or bank has to agree to make a market in the options of that particular company. For low priced shares, often it is impossible to find an interested market maker to sponsor the company.

Thanks, Ram. I thought it was more due to the reality of a company's situation than any regulation, but never knew for sure. Sounds like it's really a combination of both with several moving parts.

Yeah. Some of the rules are more general than anything hard and fast. I have seen options markets made on some stocks that fail one or more criteria because a bank really wanted to make a market in options in a specific company.

You can also petition to the stock exchange a company is listed on for the creation of options on said company. This has worked for two people I know who wanted to trade options on tiny microcap companies. That said, be prepared for wide spreads on options in these sorts of situations.

That's interesting, and somehow reassuring that individuals can still make a market like that despite all the HFT games and corporate dominance of our world. I've often wondered why no one has tried to start their own exchange that would not allow the computer gamesmanship, but I guess it would be almost impossible to find any company willing to list on it..

Hiphop: Well there is this http://www.cnsx.ca/ It is up in Canada though. I am long one of the stocks listed on it, but sadly through a US pink sheet dual-listing, as neither Interactive Brokers nor Thinkorswim has trading access to the CNSX.

That's awesome. I'll definitely check it out.

+10% today. Knife-catching worked out this time.

+35% today. Apparently they are suing the government over drilling ban. Eh.