A Prudent Option Strategy For Peabody Energy

By Bret Jensen:Given the turmoil in the markets and the real potential of a complete European meltdown, I am being exceedingly cautious here in deploying new money into the market. I am using options strategies on stocks I like at these levels to protect my portfolio on the downside and to pick up the high premiums in the options market due to that same market volatility.

As part of our series looking at the future of American energy, The Financialist spoke to Osmar Abib, global head of Credit Suisse’s oil and gas investment banking group, about the rise of natural gas production in the U.S., thanks in large part to the development of shale gas fields.    The shale drilling revolution that has allowed natural gas producers to access vast, previously unreachable resources has already had a profound impact on the U.S. energy sector, but what that means for the broader economy and global trade is a larger question.  

By Bret Jensen:The market feels like it is at an inflection point. Personally, I believe the next leg is down for myriad reasons. However, I attend to take advantage of any pullback with the cash I have kept on hand for the occasion. One strategy I employed at times like these, especially on high beta stocks in the energy and commodities sector is out of money bull put spreads.

BySmart Equity : The earnings release by Peabody Energy (BTU) today helped me reinforce my long-term bullish thesis on the coal players with a relatively high thermal coal exposure. It also helped me to decide about avoiding stocks with high metallurgical coal exposure. I recommend a long position in BTU and its peer, CONSOL Energy (CNX).

By Bret Jensen:Bank of America (BAC) is one of the hardest stocks in the market to take a position on. On one hand, it is dirt cheap by almost any measure and sells for less than 30% of book value. On the other hand, the stock has been shelled by the fallout from the housing market and concerns about the overall banking system. It also has become a favorite target of Congress, regulators and the press.

By Wall Street Strategies: By David Urani

By Alex Shadunsky: Peabody Energy (BTU) has been in a rough spot recently as coal prices have been hit hard. Coal prices have fallen because of natural gas prices have been at extreme lows and warmer than expected winter months.

By Takeover Analyst:As the global economy picks back up, two companies that I am especially bullish about are Peabody Energy (BTU) and Arch Coal (ACI). Having lost around half of their value over the last twelve months, these coal producers are gearing up for a solid turnaround story.