My Investment Idea of the Day

Introduction:

Of course, for full disclosure, I am not an investment professional (though I was previously). Furthermore, any investment should be considered in the context of many other things including age, risk tolerance, and the current diversification of your portfolio. As such, while I will gladly share this idea, I am also giving the caveat that all investment decisions are done at the investor's risk. Please do not attempt to try and sue me if you take my advice and this doesn't work.

(30 year U.S. Treasury last three months)

(Dow Jones Industrial Average last 3 mths)

(S&P 500 Index last 3 months)

Here is what we know about the financial markets. We know that there is panic and there is uncertainty. We know that everyone is scared and they are jumpy. As such, what I believe this translates into is a lot of volatility in one or both directions. Which direction I can't say for sure. As such, I recommend buying straddle options.

An option spread is a position comprising two or more options on the same underlier. Some spreads have standard names. A straddle comprises a put and a call with the same expiration and struck at the same price—usually at the money.

A straddle option bets up and down at the same time. As such, what you are betting is that market will remain volatile. Since betting on an individual stock is foolhearty, my recommendation is either the straddles for the ten year U.S. Treasury Bond or any index that has straddles like: DJIA, S&P 500, Nadaq 100, etc. The bet to make right now is on volatility and straddles is a volatility play.