3 Option Ideas for A Continued Summer Stock Market Rally: Large Upside & Limited Downside

Will the rally continue in August? Nobody knows for sure, but in this article are some option plays I have been/will be using to capture a potential large upside with a limited downside. This is a good strategy to use during this time, as the market could sell off slightly after that huge run in July, but could continue to rally through August with all the money still gathering almost nothing on the sidelines. At current share prices these ideas are currently profitable (assuming they expired at the current close price), and this strategy allows you to:

• Get in these ETF's for less
  
• Capture upside gains if the market continues to rally
  
• Limit downside loss if the market sells off

In this article I'll be talking about Vertical Call Option Spreads, to understand this you must be familiar with stock options. To learn more about stock options visit my blog or check out my E-Books here.

All data as of market close July 31, 2009.

Option Spread Strategy #1: Buy the SPDR S&P 500 (ETF) (NYSE:SPY) August $95 Call and sell the August $100 Call. The $100 strike call option is factoring in a 41.7% chance it will expire at or above it at August expiration. If it happens to expire at or above $100, the return from this position would be 65% in 20 days. The maximum that can be lost if the SPY happens to close at or below $95 per share at August expiration is $303 per contract. The ETF is currently trading above the break even price of $98.03 per share, so as of now the position is profitable. This is a great strategy to look at if the market continues to rally, while it limits the risk to $3.03 per share.

Option Spread Strategy #2: Buy the Diamonds Trust, Series 1 (ETF) (NYSE:DIA) August $88 Call and sell the August $93 Call. The $93 strike call option is factoring in a 37.6% chance it will expire at or above it at August expiration. If it happens to expire at or above $93, the return from this position would be 65.6% in 20 days. The maximum that can be lost if the DIA happens to close at or below $88 per share at August expiration is $302 per contract. The ETF is currently trading above the break even price of $91.02 per share, so as of now the position is profitable. The Dow Jones Industrial Average needs to rally approximately 1.5% by August 21, 2009 in order for this strategy to reach maximum profitability. This position limits the risk to $3.02 per share. Which if shares of the DIA were purchased a sell off of 3.5% or more on the DJIA index by August expiration would result in a greater per share loss.

Option Spread Strategy #3: Buy the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQQ) August $38 Call and sell the August $40 Call. The $40 strike call option is factoring in a 41% chance it will expire at or above it at August expiration. If it happens to expire at or above $40, the return from this position would be 68.1% in 20 days. The maximum that can be lost if the QQQQ happens to close at or below $40 per share at August expiration is $119 per contract. The ETF is currently trading above the break even price of $39.19 per share, so as of now this strategy is also profitable. The NASDAQ needs to rally approximately 1.4% by August 21, 2009 in order for this strategy to reach maximum profitability. This position limits the risk to $1.19 per share.

All option spreads must close at or above higher end of the spread at expiration to receive the maximum profit from the strategy. It is possible to lose 100% of your investment if the underlying equity closes below the lower end of the spread. These spreads can be traded which I find works well in this volatile market.

With many stocks it is possible to find a strategy that offers a 40% chance of expiring at or above that returns 100% profits. By choosing different strike prices and expiration dates you can adjust the chances of expiring in the money, and the profitability from the spread. I use the 40% 100% rule as I never have to go out too much further than 3 months- keep in mind a lot can change with options pricing overnight.

Out of the three ideas outlined above I like the NASDAQ option spread idea the most. This market can continue to rally with all the money on the sidelines, but I wouldn't be surprised if it sold off either, as we had a massive rally through July. This is why I am being cautious and limiting my downside to the amounts paid to open these spreads. To learn more about these option spreads visit OptionMaestro.com.


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Most Active Stock Options July 31, 2009

Today the top ten most active stock option contracts were:

1. Citigroup (NYSE:C) August 3 Call Option
2. Citigroup August 4 Call Option
3. PowerShares QQQ (NASDAQ:QQQQ) August 40 Put Option
4. Target (NYSE:TGT) Januray 2011 35 Call Option
5. Target January 2011 60 Call Option
6. Ford (NYSE:F) August 8 Call Options
7. SPDR S&P 500 (NYSE:SPY) August 90 Put Options
8. PowerShares QQQ August 40 Call Options
9. PowerShares QQQ August 39 Put Options
10. Bank of America (NYSE:BAC) August 15 Call Options

Looks like someone is speculating heavy with the Leap 2011 Target (NYSE:TGT) options. I am guessing an option spread was open to buy the in the money Leap 11 35 calls and sell the Leap 11 60 Calls. The Target activity could be that someone is speculating that the consumer will behave differently by January 2011. Sphere: Related Content

Earnings Preview Friday July 31, 2009

Today is the lightest day for earnings this week, as only 63 companies are scheduled to report. The companies which I'm most interested in hearing from are:

• Calpine Corporation (NYSE:CPN)
• Dryships Inc (NASDAQ:DRYS)
• United Therapeutics Corporation (NASDAQ:UTHR)

Sphere: Related Content

How to Profit & Protect the S&P 50 with Options in this Overbought Market

Thursday was another great day for the bulls on Wall Street, and another great opportunity to get short for me, as I believe this market is well overbought on the short term. The market sold off a bit going into the close, my guess is because some were taking profits before the GDP numbers. The stock market major indices are up huge since July 1, 2009; Dow Jones Industrial Average up 8.38%, NASDAQ up 8.13%, and the S&P 500 up 7.33% (click chart to enlarge).

However to reiterate myself from a previous blog post on OptionMaestro.com, this market could continue the rally with better than expected earnings, and a "less worse" economic outlook. There is still a ton of money on the sidelines gaining almost nothing, that could be put to work in the market. However I don't think a 5% short term correction is out of the picture. I am being extremely cautious committing new capital to the market at these levels, but one strategy I am using to get into this market is the Buy/Write option strategy. The buy/write option strategy allows me to get into the stocks for less than current levels, with provide me with a positive returns if the market continues to rally, and give me protection is the market sells off from the current level. In this post I will outline the top 50 companies (by market cap) in the S&P 500 index, and will provide a buy/write option strategy for each. Therefore, to understand this post you'll need some knowledge of stock options. To learn more about stock options check out my blog or book here.

For this analysis I used the S&P 500 list of stocks spreadsheet I created, to generate the top 50 stocks by market cap with the click of a button. To download this spreadsheet click here.

All data as of market close Thursday July 30, 2009.

The stocks are in order from greatest to least market cap. The first stock in the table below is Exxon Mobil (XOM) to understand how to read the table I'll give a worded example using Exxon Mobil. The example assumes the stock was being purchased and immediately written out for the August options expiration.

Purchase Exxon Mobil (XOM) stock, and sell the in the money August 70 strike call option. The premium received from the call option would give a downside protection of 2.47%. If the stock is assigned at options expiration on August 22, 2009 the total return from this position would be 1.46%. The August options expiration is 22 calendar days away, so it may be best to monitor the position and buy back the call option on weakness of the underlying stock, if the stock rallies after it is purchased back, write it back out for a higher premium.

Company	Exchange	Ticker	Strike	Premium	Return%	Protection %
Exxon Mobil Corporation	NYSE	XOM	70	1.75	1.46	2.47
Microsoft Corporation	NASDAQ	MSFT	23	1.11	1.26	4.66
Wal-Mart Stores, Inc.	NYSE	WMT	47.5	2.64	0.32	5.28
Johnson & Johnson	NYSE	JNJ	60	2.22	0.70	3.59
The Procter & Gamble Company	NYSE	PG	55	2.1	1.55	3.73
International Business Machines Corp.	NYSE	IBM	115	4	0.97	3.39
AT&T Inc.	NYSE	T	26	0.76	1.59	2.89
Apple Inc.	NASDAQ	AAPL	160	6.05	2.00	3.72
JPMorgan Chase & Co.	NYSE	JPM	37	2.14	1.74	5.56
Google Inc.	NASDAQ	GOOG	430	21.3	1.27	4.78
Chevron Corporation	NYSE	CVX	65	3.45	1.11	5.10
General Electric Company	NYSE	GE	12	1.28	1.30	9.76
Cisco Systems, Inc.	NASDAQ	CSCO	21	1.29	1.41	5.87
Bank of America Corporation	NYSE	BAC	13	1.21	1.72	8.66
Wells Fargo & Company	NYSE	WFC	24	1.4	2.13	5.63
The Coca-Cola Company	NYSE	KO	47.5	2.4	0.46	4.83
Oracle Corporation	NASDAQ	ORCL	21	1.33	0.86	6.01
Intel Corporation	NASDAQ	INTC	19	0.66	1.71	3.41
Pfizer Inc.	NYSE	PFE	15	0.99	0.31	6.21
Hewlett-Packard Company	NYSE	HPQ	42.5	1.55	3.14	3.63
Philip Morris International Inc.	NYSE	PM	46	1.55	1.56	3.31
Verizon Communications Inc.	NYSE	VZ	31	1.53	0.68	4.74
PepsiCo, Inc.	NYSE	PEP	55	2.17	1.01	3.83
Goldman Sachs Group, Inc.	NYSE	GS	160	5.95	2.17	3.66
QUALCOMM, Inc.	NASDAQ	QCOM	45	2.16	1.38	4.64
Abbott Laboratories	NYSE	ABT	44	2.15	0.98	4.70
ConocoPhillips	NYSE	COP	42	1.97	1.81	4.56
Schlumberger Limited	NYSE	SLB	50	4.25	1.53	7.95
Merck & Co., Inc.	NYSE	MRK	29	1.55	2.04	5.18
Amgen, Inc.	NASDAQ	AMGN	60	4.2	1.73	6.66
Wyeth	NYSE	WYE	45	2.03	0.73	4.35
McDonald's Corporation	NYSE	MCD	55	1.4	1.46	2.52
Occidental Petroleum Corporation	NYSE	OXY	70	2.7	2.99	3.82
United Parcel Service, Inc.	NYSE	UPS	55	0.73	3.94	1.36
CVS Caremark Corporation	NYSE	CVS	32.5	1.7	1.82	5.06
United Technologies Corporation	NYSE	UTX	55	0.98	3.23	1.81
The Walt Disney Company	NYSE	DIS	25	1.78	2.14	6.79
3M Company	NYSE	MMM	70	1.5	2.29	2.15
Monsanto Company	NYSE	MON	85	2.55	3.70	3.02
Gilead Sciences, Inc.	NASDAQ	GILD	49	1.55	1.96	3.13
The Home Depot, Inc.	NYSE	HD	25	1.37	2.01	5.30
Schering-Plough Corporation	NYSE	SGP	26	0.93	1.62	3.51
Comcast Corporation	NASDAQ	CMCSA	15	0.67	4.33	4.46
Bristol Myers Squibb Co.	NYSE	BMY	21	0.9	1.58	4.17
Kraft Foods Inc.	NYSE	KFT	28	1.15	2.03	4.03
Eli Lilly & Co.	NYSE	LLY	35	0.63	1.65	1.80
Medtronic, Inc.	NYSE	MDT	35	1.08	2.04	3.05
U.S. Bancorp	NYSE	USB	20	0.92	2.15	4.49
Colgate-Palmolive Company	NYSE	CL	70	2.7	1.21	3.76
Morgan Stanley	NYSE	MS	28	1.22	3.03	4.30

As the Volatility index is creeping back up, call option premiums should increase in value overall, protecting and giving an even higher return. I use this strategy to write my shares out on strength, and purchase them back on weakness (if I am profitable). For example: using this strategy has allowed me to cost average my position on Caterpillar (NYSE:CAT) down to $4.88 a share. Patience is key to succeed with this strategy. If the stock gets called out, and you miss the upside, the position is still profitable and you can always do it again for the next options expiration. If the stock gets hammered and you're down on the position, this strategy will keep you in the game and allow you to cost average the shares down month after month.

All of these options expire on August 22; therefore the last trading day is Friday, August 21, 2009.

These are just examples and are not recommendations to buy or sell any security; if you're more bullish/bearish, you’ll want to adjust the strike price and expiration accordingly.

This strategy will give protection if the market sells off, as well as provide a return if the market continues to rally. If the stock is not assigned, this strategy is a great way to create additional income for your portfolio. The reason option volumes have surged in the last 5 years is because they are a great way to hedge your portfolio as well as create income off of your shares (see chart here). Keep in mind when using this strategy it is essential that broker commissions are low enough to profit from the position.

Sphere: Related Content

Most Active Stock Options July 30, 2009

As of today the top ten most active stock option contracts traded are listed below (from most traded to least).

1. Citigroup (C) August 3 Call Option
2. Citigroup August 5 Put Option
3. Citigroup December 3 Call Option
4. Citigroup August 3 Put Option
5. Citigroup August 5 Call Option
6. Plains All American Pipeline, L.P. (PAA) August 45 Call Options
7. SPDR Financial (XLF) August 12 Call Options
8. SPDR S&P 500 (SPY) August 100 Call Options
9. Citigroup August 10 Call Options
10. Citigroup September 4 Call Options

The reason Plains All America Pipeline 45 Call options were among the most active is most likely a dividend play, as they spin out $0.905 a share tomorrow. However I find it very strange that the Citigroup Inc. (C) 10 strike August call options were among the most active today. Sphere: Related Content

Earnings Preview Thursday July 30, 2009

Today is the busiest day for earnings this week. With over 300 companies (305 to be exact) reporting earnings. The companies I will be keeping a close eye on and listening to conference calls for are:

• Apache Corp (NYSE:APA)
• Astronics Corporation (NASDAQ:ATRO)
• Dow Chemical Company (NYSE:DOW)
• Dresser Rand Group Inc (NYSE:DRC)
• Exxon Mobil Corp (NYSE:XOM)
• First Solar Inc (NASDAQ:FSLR)
• Las Vegas Sands Corp (NYSE:LVS)
• Level 3 Communications Inc (NASDAQ:LVLT)
• Mastercard Inc (NYSE:MA)
• Oshkosh Corp (NYSE:OSK)
• Wynn Resorts (NASDAQ:WYNN)

This doesn't account for the ones I have forgot. Sphere: Related Content

Early Indicator: Stock Market Futures Thursday July 30, 2009

As of now the stock market futures are modestly higher across the board.

The DOW futures are up 52 points, the S&P 500 futures are higher by 6.20 points, and the NASDAQ 100 futures are higher by 11.25 points. Sphere: Related Content

LaserCard Option Play Pays off BIG

As stated on my blog post Bullish Breakout Stocks on HUGE Volume Saturday, I was looking to get into some speculative options on LaserCard Corporation (LCRD). LaserCard, Like STEC Inc. (STEC), was another stock I found with some extensive homework, and the help of IBD. Today I swapped out of 80% of my option contracts for a 700+% gain in 2 days. I purchased these contracts for $35 per contract, and sold them today for $250 a piece. This is extremely risky, but is one example of how options can pay off in huge ways. This type of strategy should only be used if the person doing it is willing to lose 100% of the position.


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Most Active Stock Options July 29, 2009

The top ten most active stock option contracts that traded Wednesday July 29, 2009 are listed in order from greatest to least below.

1. Citigroup (C) August 3 Call Option
2. Citigroup September 4 Call Option
3. United States Oil Fund (USO) January 55 Call Option
4. Yahoo (YHOO) August 16 Call Option
5. Citigroup August 3 Put Option
6. Citigroup August 1 Call Options
7. SPDR S&P 500 (SPY) August 81 Put Options
8. Citigroup September 4 Put Options
9. Citigroup September 3 Call Option
10. PowerShares QQQ (QQQQ) January 38 Put Options

Looks like someone is speculating heavy with oil, as the USO had very unusual volume. Read my blog post here for some crude oil option plays. Sphere: Related Content

Oil Takes a Dive; is it Still Alive? 45 Oil & Gas Option Strategies

As oil sold off over 6% Tuesday, I was searching for some companies to buy on the dip. I decided to look at opening the position with the buy/write option strategy, as this would give me a return if oil rallies, as well as protect my position to the downside if oil continued to slide. As recently stated on OptionMaestro.com, I believed oil would peak in early to mid July. However if we keep hearing of these "green shoots" and the stock market continues to rally, I believe oil could continue to rally as well, and as late as October in my opinion. I don't think $75 a barrel oil is out of the question, especially on the back of a weak dollar.

For this analysis I have gathered a list of the top fourty energy stocks (by market cap) from the S&P 500 index. I will outline an option idea on each stock which will provide a return (if crude oil/the market keep rallying and the stock is assigned at expiration), as well as downside protection on the stock (in case the market happens to sell off). I have also included 5 energy related ETF's. Therefore to understand this post, you'll need a general understanding of stock options. To learn more about options and, how options can help protect your portfolio, and allow you to speculate with less money up front; check out my book here.

All data as of market close Wednesday July 29, 2009.


The stocks are in order from greatest to least market cap. The first stock in the table below is Exxon Mobil (XOM) to understand how to read the table I'll give a worded example using XOM. The example assumes the stock was being purchased and immediately written out for the August options expiration.

Purchase Exxon Mobil (XOM) stock, and sell the in the money August 70 strike call option. The premium received from the call option would give a downside protection of 3.35%. If the stock is assigned at options expiration on August 22, 2009 the total return from this position would be 2.86%. The current options market is factoring in a 64.4% probability Exxon Mobil will be at or above 70 a share by the August options expiration.

Company	Ticker	Strike	Return %	Protection %	Probability %
Exxon Mobil Corporation	XOM	70	2.86	3.35	64.4
Chevron Corporation	CVX	70	6.19	1.05	26.6
ConocoPhillips	COP	45	6.14	1.14	26.1
Schlumberger Limited	SLB	55	6.84	2.06	33.5
Occidental Petroleum Corporation	OXY	75	8.78	0.83	18.8
Apache Corporation	APA	80	5.30	2.63	40.9
Devon Energy Corporation	DVN	60	9.87	1.39	25.9
Anadarko Petroleum Corporation	APC	49	7.73	1.90	30.9
XTO Energy Inc.	XTO	40	5.49	2.37	37.9
Marathon Oil Corporation	MRO	32	6.12	2.43	40.4
Halliburton Company	HAL	22	5.00	3.15	44.6
EOG Resources, Inc.	EOG	75	7.38	1.59	28.8
Hess Corp.	HES	55	7.95	1.60	27.9
National-Oilwell Varco, Inc.	NOV	36	6.04	3.01	41.4
Southwestern Energy Company	SWN	42	7.94	2.75	37.2
Chesapeake Energy Corporation	CHK	21	6.32	4.28	46.7
Diamond Offshore Drilling, Inc.	DO	95	6.53	1.74	31.6
Baker Hughes Incorporated	BHI	40	5.70	2.95	41.5
Spectra Energy Corp.	SE	17.5	1.63	2.99	61.1
Murphy Oil Corporation	MUR	60	7.46	1.85	30.9
Noble Energy, Inc.	NBL	60	7.57	1.68	29.5
Williams Companies, Inc.	WMB	17.5	9.10	1.54	24.6
Valero Energy Corporation	VLO	18	6.26	2.87	44.6
Peabody Energy Corporation	BTU	33	6.49	4.04	46.5
Range Resources Corp.	RRC	47.5	7.29	1.71	30.4
El Paso Corporation	EP	10	6.15	3.59	44.1
Cameron International Corporation	CAM	30	4.90	4.84	52
CONSOL Energy Inc.	CNX	35	8.36	3.88	40.9
Ensco International Incorporated	ESV	40	9.28	1.35	24.3
Smith International, Inc.	SII	25	7.98	2.94	36.7
FMC Technologies, Inc.	FTI	45	8.72	1.50	26.3
Nabors Industries Ltd.	NBR	17.5	10.39	2.16	29.1
BJ Services Company	BJS	14	5.99	3.65	45
Denbury Resources Inc.	DNR	15	3.36	8.24	67.1
Cabot Oil & Gas Corporation	COG	35	5.60	3.50	44.8
Pioneer Natural Resources	PXD	30	15.05	1.33	19.4
Sunoco, Inc.	SUN	25	5.53	2.27	38.7
Rowan Companies, Inc.	RDC	20	3.74	6.56	62.2
Massey Energy Company	MEE	25	8.07	5.15	46.2
Tesoro Corporation	TSO	14	12.34	2.97	33.3

ETF	Ticker	Strike	Return %	Protection %	Probability %
Energy Select Sector SPDR (ETF)	XLE	52	6.29	1.11	25.4
United States Natural Gas Fund, LP	UNG	13	9.21	5.05	44.3
United States Oil Fund LP (ETF)	USO	35	7.05	2.48	36.2
ProShares Ultra DJ-UBS Crude Oil(ETF)	UCO	11	12.66	4.71	38.4
ProShares Ultra Oil & Gas (ETF)	DIG	29	7.44	3.23	39

All of these options expire on August 22; therefore the last trading day is Friday, August 21, 2009.

These are just examples and are not recommendations to buy or sell any security; if you're more bullish/bearish, you’ll want to adjust the strike price and expiration accordingly.

This strategy will give protection if the market sells off, as well as provide a return if the market continues to rally. If the stock is not assigned, this strategy is a great way to create additional income for your portfolio. The reason option volumes have surged in the last 5 years is because they are a great way to hedge your portfolio as well as create income off of your shares (see chart here). Keep in mind when using this strategy it is essential that broker commissions are low enough to profit from the position.

Sphere: Related Content

Mid Day Most Active Stock Options July 29, 2009

As of now the top ten most active traded stock option contracts are listed below (from greatest to least).

1. Citigroup (C) August 3 Call Option
2. Yahoo (YHOO) August 16 Call Option
3. PowerShares QQQ (QQQQ) January 38 Put Option
4. Citigroup August 3 Put Option
5. iShares MSCI Emerging Markets Index (EEM) September 31 Put Option
6. iShares MSCI Emerging Markets Index December 31 Put Options
7. Volatility Index (VIX) October 30 Put Options
8. Citigroup September 3 Call Options
9. Volatility Index October 42.50 Call Options
10. SLM Corporation (SLM) January 2011 2.50 Put Options

Sphere: Related Content

Earnings Preview Wednesday July 29, 2009

Today is another huge earnings day with 257 companies expected to report earnings. The companies which I will be keeping a close eye on for today are:

• ConocoPhillips (COP)
• Hess Corp (HES)
• O'Reilly Automotive, Inc. (ORLY)
• Sprint Nextel Corp (S)
• Time Warner Cable Inc (TWC)
• Time Warner Inc (TWX)
• Visa Inc (V)

I'm interested in what both ConocoPhillips and Hess have to say about the future of the oil & gas industry, and if they believe the economy has bottomed. I believe Visa should have another great quarter, but really want to hear their outlook on the consumer. I'm also anxious to hear what sprint has to say about the impact the Palm (PALM) Pre has made if any. This could be very good news for Palm. Sphere: Related Content

Early Indicator: Stock Market Futures Wednesday July 29, 2009

As of now the stock market futures are down across the board. It seems to be the new trend that the futures are down very early, but snap back to finish the day green or flat. Can we keep the rally going?

Currently the DOW futures are down 27 points, S&P futures down 3.90 points, and the NASDAQ 100 futures are down 3.25 points. Sphere: Related Content

Most Active Stock Options July 28, 2009

For July 28, 2009 the top ten most traded option contracts are listed in order below, from the greatest number of contracts traded to the least.

1. Citigroup (C) August 3 Call Option
2. Enterprise Products Partners L.P. (EPD) August 25 Call Option
3. Citigroup September 3 Call Option
4. ConocoPhillips (COP) August 38 Call Option
5. ConocoPhillips August 40 Call Option
6. E-Trade Financial (ETFC) January 1 Call Options
7. Citigroup August 3 Put Options
8. Bank of America (BAC) AUgust 16 Call Options
9. General Electric (GE) December 11 Put Options
10. Enterprise Products Partners L.P. September 25 Call Options

Both ConocoPhillips (NYSE:COP) and Enterprise Products Partners L.P. (NYSE:EPD) are both spinning out dividends tomorrow. This is an option dividend play which caused the volume of these contracts to be traded today. Nothing unusual. Sphere: Related Content

Are we Overbought? 20 Option Ideas to Profit & Protect Financial Stocks

Another day in the books, but there still hasn't been too much selling pressure, with the S&P 500 down about a quarter of one percent. As I recently stated on my blog, I think there is a sell off ahead, or at least that is what the Volatility Index (VIX) is telling me.

Yesterday I chose to analyze 20 stocks from the NASDAQ (which is the index which has gained the most over the past 3 months), today I will perform the same analysis but by sector. If we do get a sell off I believe the stocks which will suffer the most are the financials, as they have had the best gains over the past 3 months. The chart below shows four major SPDR sector ETF's: Financial, Health Care, Technology, and Energy (click image to enlarge).

As you can see the Financials have outperformed the other three sectors.

The Volatility Index rose again Monday by 3.01%, which again is an indicator to me that many are betting on a short term correction or sell off ahead. To reiterate a previous yet again: with all the cash on the sidelines (getting dirt cheap returns), this market could keep rallying with better than estimated earnings reports, and outlooks of an improving economy, however it never hurt anyone to take profits and protect on the downside a bit.

For this analysis I have gathered a list of the top twenty financial stocks (by market cap) from the S&P 500 index. I will outline an option idea on each stock which will provide a return (if the market keeps rallying and the stock is assigned at expiration), as well as downside protection on the stock (in case the market happens to sell off). Therefore to understand this post, you'll need a general understanding of stock options. To learn more about options and, how options can help protect your portfolio, and allow you to speculate with less money up front; check out my book here.

All data as of market close Tuesday July 28, 2009.

The stocks are in order from greatest to least market cap. The first stock in the table below is JP Morgan (JPM) to understand how to read the table I'll give a worded example using JPM. The example assumes the stock was being purchased and immediately written out for the August options expiration.

Purchase JP Morgan (JPM) stock, and sell the August 39 strike call option. The premium received from the call option would give a downside protection of 2.49%. If the stock is assigned at options expiration on August 22, 2009 the total return from this position would be 4.91%. The current options market is factoring in a 41.2% probability JP Morgan will be at or above 39 a share by the August options expiration.

Company	Symbol	Strike	Return %	Protection %	Probability %
JPMorgan Chase & Co.	JPM	39	4.91	2.49	41.2
Bank of America Corporation	BAC	14	7.72	2.77	36.7
Wells Fargo & Company	WFC	25	5.22	3.26	43.3
Goldman Sachs Group, Inc.	GS	165	4.78	2.01	37.7
U.S. Bancorp	USB	20	3.61	3.36	50.6
Morgan Stanley	MS	28	5.1	3.03	43.7
American Express Company	AXP	29	7.41	2.64	35.7
The Bank of New York Mellon Corporation	BK	28	6.66	1.94	32.1
MetLife, Inc.	MET	34	6.53	3.34	41.6
The Travelers Companies, Inc.	TRV	45	5.42	1.61	32.6
State Street Corporation	STT	50	7.03	2.14	33.7
The Charles Schwab Corporation	SCHW	17	3.47	3.41	50.6
Franklin Resources, Inc.	BEN	80	0.77	1.43	27.8
Prudential Financial, Inc.	PRU	44	7.74	4.91	45.7
CME Group Inc.	CME	280	7.56	2.51	35.1
AFLAC Incorporated	AFL	38	6.91	3.09	39.1
PNC Financial Services	PNC	37.5	6.16	3.42	43
Citigroup Inc.	C	3	7.41	6.4	51.4
The Chubb Corporation	CB	45	2.41	2.77	51.8
BB&T Corporation	BBT	23	7.01	2.28	34.4

All of these options expire on August 22; therefore the last trading day is Friday, August 21, 2009.

These are just examples and are not recommendations to buy or sell any security; if you're more bullish/bearish, you’ll want to adjust the strike price and expiration accordingly.

This strategy will give protection if the market sells off, as well as provide a return if the market continues to rally. If the stock is not assigned, this strategy is a great way to create additional income for your portfolio. The reason option volumes have surged in the last 5 years is because they are a great way to hedge your portfolio as well as create income off of your shares (see chart here). Keep in mind when using this strategy it is essential that broker commissions are low enough to profit from the position.


Sphere: Related Content

The S&P 500 Index by Market Cap NYSE NASDAQ Stocks

I am going to do an analysis on the top 20 Financial stocks in the S&P 500. I will be analyzing these stocks by selling below the current share price put options to see which of them give the lowest adjusted share price. Below is a list of the S&P 500 stocks ranked in order from greatest to least market cap and their sectors. To download an excel spreadsheet that will refresh this data on a daily basis click here. Refresh sheet 1 and flip to sheet 2, there you'll be able to sort the companies alphabetically by company name, ticker, and by industry, and you'll also be able to rank them in order by their market cap by the minute with the click of a button. Use this blog post as a start to see which companies (stocks) have moved up and down the list of S&P 500.

Company	Symbol	Sector	Market Cap
Exxon Mobil Corp	XOM	Energy	350,802,348,922
Microsoft Corp	MSFT	Information Technology	209,070,753,883
Wal-Mart Stores	WMT	Consumer Staples	190,622,545,425
Johnson & Johnson	JNJ	Health Care	167,869,075,674
Procter & Gamble	PG	Consumer Staples	162,378,045,752
Intl Business Machines Corp	IBM	Information Technology	154,973,438,547
AT&T Inc	T	Telecommunications Services	150,568,002,701
Apple Inc.	AAPL	Information Technology	143,330,688,000
JP Morgan Chase & Co	JPM	Financials	143,148,819,683
Google Inc	GOOG	Information Technology	139,245,163,802
Chevron Corp	CVX	Energy	136,999,277,139
General Electric Co	GE	Industrials	132,581,546,448
Cisco Systems Inc	CSCO	Information Technology	126,489,610,160
Bank of America Corp	BAC	Financials	115,410,464,380
Wells Fargo & Co	WFC	Financials	114,462,991,097
Coca-Cola Co	KO	Consumer Staples	114,337,848,587
Oracle Corp	ORCL	Information Technology	111,360,794,054
Intel Corp	INTC	Information Technology	108,181,454,687
Pfizer Inc	PFE	Health Care	108,170,108,003
Hewlett-Packard Co	HPQ	Information Technology	100,175,277,668
Philip Morris International	PM	Consumer Staples	91,174,098,062
Verizon Communications Inc	VZ	Telecommunications Services	89,207,398,916
PepsiCo Inc	PEP	Consumer Staples	87,193,314,162
Goldman Sachs Group Inc	GS	Financials	80,819,203,960
QUALCOMM Inc	QCOM	Information Technology	77,064,692,615
Abbott Laboratories	ABT	Health Care	70,210,202,842
ConocoPhillips	COP	Energy	66,521,776,861
Schlumberger Ltd	SLB	Energy	65,323,820,374
Merck & Co Inc	MRK	Health Care	63,302,244,345
Amgen Inc	AMGN	Health Care	63,192,258,386
Wyeth	WYE	Health Care	62,410,560,183
McDonald's Corp	MCD	Consumer Discretionary	62,300,133,557
Occidental Petroleum	OXY	Energy	58,110,195,419
United Parcel Service Inc B	UPS	Industrials	53,214,701,309
CVS Caremark Corp.	CVS	Consumer Staples	49,616,427,146
United Technologies Corp	UTX	Industrials	49,360,375,803
Walt Disney Co	DIS	Consumer Discretionary	48,962,551,798
3M Co	MMM	Industrials	48,798,648,598
Monsanto Co.	MON	Materials	45,458,281,928
Gilead Sciences Inc	GILD	Health Care	45,075,052,773
Home Depot Inc	HD	Consumer Discretionary	43,249,198,010
Schering-Plough Corp	SGP	Health Care	42,988,934,217
Comcast Corp A	CMCSA	Consumer Discretionary	42,933,469,630
Bristol-Myers Squibb	BMY	Health Care	41,955,992,105
Kraft Foods Inc A	KFT	Consumer Staples	41,928,992,199
Lilly Eli & Co	LLY	Health Care	40,295,990,769
Medtronic Inc	MDT	Health Care	38,642,678,541
US Bancorp	USB	Financials	38,144,401,459
Colgate-Palmolive Co	CL	Consumer Staples	37,652,200,348
Morgan Stanley	MS	Financials	37,282,966,135
Amazon.com Inc	AMZN	Consumer Discretionary	36,694,994,302
Altria Group Inc	MO	Consumer Staples	36,349,216,522
Unitedhealth Group Inc	UNH	Health Care	34,590,979,789
Exelon Corp	EXC	Utilities	34,268,430,200
Baxter Intl Inc	BAX	Health Care	33,379,184,006
American Express Co	AXP	Financials	32,911,520,363
Target Corp	TGT	Consumer Discretionary	32,506,000,827
Time Warner Inc	TWX	Consumer Discretionary	32,316,195,804
The Bank of New York Mellon Corp	BK	Financials	32,163,620,445
Lowe's Cos Inc	LOW	Consumer Discretionary	31,907,684,541
Boeing Co	BA	Industrials	31,418,196,975
EMC Corp	EMC	Information Technology	30,937,334,786
Texas Instruments Inc	TXN	Information Technology	30,513,847,234
Walgreen Co	WAG	Consumer Staples	30,019,498,025
Lockheed Martin	LMT	Industrials	28,853,537,240
Union Pacific Corp	UNP	Industrials	28,523,474,525
eBay Inc.	EBAY	Information Technology	28,099,169,476
Emerson Electric Co	EMR	Industrials	27,367,487,128
Dell Inc	DELL	Information Technology	27,297,184,942
DuPont E.I. de Nemours	DD	Materials	27,198,601,145
News Corporation A	NWSA	Consumer Discretionary	26,976,045,762
Metlife Inc	MET	Financials	26,969,901,829
Caterpillar Inc	CAT	Industrials	26,640,900,948
Burlington Northern Santa Fe Co	BNI	Industrials	26,409,640,156
WellPoint Inc	WLP	Health Care	26,354,680,214
Apache Corp	APA	Energy	26,332,187,774
Celgene Corp	CELG	Health Care	26,259,458,574
DIRECTV Group Inc	DTV	Consumer Discretionary	26,257,643,781
Corning Inc	GLW	Information Technology	26,148,501,301
Honeywell Intl Inc	HON	Industrials	25,682,648,663
NIKE Inc B	NKE	Consumer Discretionary	25,626,884,352
Travelers Cos Inc	TRV	Financials	25,378,367,932
Devon Energy Corp	DVN	Energy	25,240,154,271
Southern Co	SO	Utilities	25,037,878,400
Medco Health Solutions Inc	MHS	Health Care	24,789,040,257
Kimberly-Clark	KMB	Consumer Staples	24,373,269,759
Mastercard Inc A	MA	Information Technology	24,183,736,438
Freeport McMoRan Copper & Gold	FCX	Materials	24,116,460,939
Yahoo Inc	YHOO	Information Technology	24,033,143,702
Carnival Corp	CCL	Consumer Discretionary	23,861,933,245
Anadarko Petroleum Corp	APC	Energy	23,661,687,342
State Street Corp	STT	Financials	23,547,630,035
Praxair Inc	PX	Materials	23,490,448,709
FPL Group Inc	FPL	Utilities	23,452,172,433
XTO Energy Inc	XTO	Energy	23,298,053,786
Marathon Oil Corp	MRO	Energy	22,875,261,928
Ford Motor Co	F	Consumer Discretionary	22,657,004,576
Costco Wholesale Corp	COST	Consumer Staples	21,239,539,266
General Dynamics	GD	Industrials	20,690,884,088
FedEx Corp	FDX	Industrials	20,492,247,053
Dominion Resources Inc	D	Utilities	20,141,223,798
Illinois Tool Works Inc	ITW	Industrials	20,097,569,625
Archer-Daniels-Midland Co	ADM	Consumer Staples	19,979,024,979
Halliburton Co	HAL	Energy	19,837,725,600
Newmont Mining Corp	NEM	Materials	19,766,511,327
Schwab Charles Corp	SCHW	Financials	19,697,050,415
Duke Energy Corp	DUK	Utilities	19,692,905,645
Danaher Corp	DHR	Industrials	19,395,325,229
General Mills Inc	GIS	Consumer Staples	19,225,577,876
Dow Chemical	DOW	Materials	18,711,086,103
Automatic Data Processing	ADP	Information Technology	18,681,156,370
Franklin Resources Inc	BEN	Financials	18,665,082,057
Thermo Fisher Scientific	TMO	Health Care	18,560,538,489
EOG Resources	EOG	Energy	18,380,468,339
Kellogg Co	K	Consumer Staples	18,292,785,327
Prudential Financial Inc	PRU	Financials	18,155,797,388
Raytheon Co	RTN	Industrials	18,028,710,403
Applied Materials Inc	AMAT	Information Technology	17,836,008,453
Deere & Co	DE	Industrials	17,814,769,022
Chicago Mercantile Exchange	CME	Financials	17,689,313,281
Express Scripts Inc	ESRX	Health Care	17,623,120,341
Hess Corp	HES	Energy	17,519,430,917
Becton Dickinson & Co	BDX	Health Care	17,258,411,021
AFLAC Inc	AFL	Financials	17,108,460,667
Adobe Systems Inc	ADBE	Information Technology	16,973,186,301
PNC Finl Services Group	PNC	Financials	16,826,500,000
Public Service Enterprise Grp	PEG	Utilities	16,651,989,310
Citigroup Inc	C	Financials	16,357,869,158
Boston Scientific Corp	BSX	Health Care	16,127,660,313
Norfolk Southern Corp	NSC	Industrials	16,013,859,606
Allergan Inc	AGN	Health Care	15,976,601,166
Yum! Brands Inc	YUM	Consumer Discretionary	15,858,307,203
Chubb Corp	CB	Financials	15,801,483,947
Motorola Inc	MOT	Information Technology	15,634,209,314
Entergy Corp	ETR	Utilities	15,598,040,754
CSX Corp	CSX	Industrials	15,566,028,499
Best Buy Co Inc	BBY	Consumer Discretionary	15,563,499,865
Stryker Corp	SYK	Health Care	15,488,846,100
Air Products & Chemicals Inc	APD	Materials	15,438,903,684
National Oilwell Varco Inc	NOV	Energy	15,283,374,871
Kohl's Corp	KSS	Consumer Discretionary	15,150,264,139
Staples Inc	SPLS	Consumer Discretionary	15,007,706,993
TJX Cos Inc	TJX	Consumer Discretionary	14,990,593,000
Johnson Controls Inc	JCI	Consumer Discretionary	14,904,749,546
Genzyme Corp	GENZ	Health Care	14,761,491,881
American Electric Power	AEP	Utilities	14,536,439,732
PG&E Corporation	PCG	Utilities	14,513,522,462
Waste Management Inc	WMI	Industrials	14,474,698,878
Nucor Corp	NUE	Materials	14,235,828,270
BB&T Corp	BBT	Financials	14,231,572,687
Southwestern Energy Co	SWN	Energy	14,171,582,209
Biogen Idec Inc	BIIB	Health Care	14,159,716,350
Allstate Corp	ALL	Financials	14,111,731,292
Symantec Corp	SYMC	Information Technology	14,066,695,544
Northern Trust Corp (IL)	NTRS	Financials	13,960,335,932
Northrop Grumman Corp	NOC	Industrials	13,945,850,385
Simon Property Group	SPG	Financials	13,927,251,639
Broadcom Corp A	BRCM	Information Technology	13,905,036,454
Kroger Co	KR	Consumer Staples	13,726,051,301
Sysco Corp	SYY	Consumer Staples	13,709,168,961
St Jude Medical Inc	STJ	Health Care	13,601,357,082
Juniper Networks Inc	JNPR	Information Technology	13,586,490,811
American Tower Corp A	AMT	Telecommunications Services	13,334,709,512
Capital One Financial	COF	Financials	13,329,288,137
Chesapeake Energy Corp	CHK	Energy	13,143,333,345
Aetna Inc	AET	Health Care	12,942,223,591
Diamond Offshore Drilling	DO	Energy	12,929,881,855
Western Union Co	WU	Information Technology	12,926,802,214
Sprint Nextel Corp	S	Telecommunications Services	12,835,724,287
Starbucks Corp	SBUX	Consumer Discretionary	12,775,224,449
Loews Corp	L	Financials	12,768,342,636
Avon Products	AVP	Consumer Staples	12,751,718,422
FirstEnergy Corp	FE	Utilities	12,699,442,717
Sempra Energy	SRE	Utilities	12,678,739,603
McKesson Corp	MCK	Health Care	12,581,357,658
PPL Corp	PPL	Utilities	12,526,199,368
Baker Hughes Inc	BHI	Energy	12,409,722,982
Reynolds American Inc	RAI	Consumer Staples	12,401,815,843
Heinz H.J. Co	HNZ	Consumer Staples	12,150,356,689
Lorillard Inc	LO	Consumer Staples	11,952,000,000
Time Warner Cable Inc	TWC	Consumer Discretionary	11,940,615,990
Public Storage	PSA	Financials	11,917,425,059
Cardinal Health Inc	CAH	Health Care	11,892,880,450
PACCAR Inc	PCAR	Industrials	11,879,637,093
T Rowe Price Group Inc	TROW	Financials	11,776,530,825
Spectra Energy Corp	SE	Energy	11,686,938,481
Gap Inc	GPS	Consumer Discretionary	11,176,982,210
Murphy Oil Corp	MUR	Energy	11,117,181,885
Precision Castparts Corp	PCP	Industrials	11,030,684,267
Alcoa Inc	AA	Materials	10,971,433,447
CA Inc	CA	Information Technology	10,936,937,296
Progress Energy Inc	PGN	Utilities	10,924,361,616
Consolidated Edison Inc	ED	Utilities	10,720,882,149
Campbell Soup Co	CPB	Consumer Staples	10,684,662,400
Progressive Corp	PGR	Financials	10,669,199,715
Edison Intl	EIX	Utilities	10,601,896,746
Aon Corp	AOC	Financials	10,543,437,739
Omnicom Group	OMC	Consumer Discretionary	10,484,801,708
McGraw-Hill Cos Inc	MHP	Consumer Discretionary	10,409,949,520
Apollo Group Inc	APOL	Consumer Discretionary	10,320,283,735
Marsh & McLennan Companies	MMC	Financials	10,241,715,599
Noble Energy Inc	NBL	Energy	10,158,169,095
Republic Services Inc	RSG	Industrials	10,072,292,058
Quest Diagnostics	DGX	Health Care	9,977,660,915
Zimmer Holdings Inc	ZMH	Health Care	9,974,066,208
Fluor Corp	FLR	Industrials	9,648,378,719
Williams Cos Inc	WMB	Energy	9,635,401,558
Paychex Inc	PAYX	Information Technology	9,615,959,547
Intuit Inc	INTU	Information Technology	9,565,937,081
Ecolab Inc	ECL	Materials	9,468,911,669
Valero Energy Corp	VLO	Energy	9,460,424,026
Hershey Foods Corp	HSY	Consumer Staples	9,337,608,413
CH Robinson Worldwide Inc	CHRW	Industrials	9,096,465,059
Bed Bath & Beyond Inc	BBBY	Consumer Discretionary	9,085,064,341
Peabody Energy Corp	BTU	Energy	9,007,223,273
Coca-Cola Enterprises	CCE	Consumer Staples	8,981,616,668
Xcel Energy Inc	XEL	Utilities	8,958,342,374
Coach Inc	COH	Consumer Discretionary	8,908,225,348
Cognizant Tech Solutions Corp	CTSH	Information Technology	8,836,639,075
ConAgra Foods Inc	CAG	Consumer Staples	8,797,646,551
Vornado Realty Trust	VNO	Financials	8,794,293,723
SunTrust Banks Inc (GA)	STI	Financials	8,648,949,316
PPG Industries Inc	PPG	Materials	8,644,653,544
ITT Corporation	ITT	Industrials	8,614,060,333
L-3 Communications Holdings	LLL	Industrials	8,579,473,762
Eaton Corp	ETN	Industrials	8,518,463,773
Intuitive Surgical Inc	ISRG	Health Care	8,482,948,484
Clorox Co	CLX	Consumer Staples	8,357,391,598
AES Corp	AES	Utilities	8,313,305,246
AutoZone Inc	AZO	Consumer Discretionary	8,256,199,579
Molson Coors Brewing Co B	TAP	Consumer Staples	8,178,293,410
Sears Holdings Corp	SHLD	Consumer Discretionary	8,164,268,114
Cummins Inc	CMI	Industrials	8,131,190,999
Analog Devices Inc	ADI	Information Technology	8,027,276,338
Agilent Technologies Inc	A	Information Technology	7,996,712,645
Intl Paper Co	IP	Materials	7,956,928,963
NetApp Inc	NTAP	Information Technology	7,905,404,681
Forest Laboratories	FRX	Health Care	7,891,857,194
Safeway Inc	SWY	Consumer Staples	7,855,190,254
Invesco Ltd	IVZ	Financials	7,851,276,084
CIGNA Corp	CI	Health Care	7,765,938,227
Fiserv Inc	FISV	Information Technology	7,706,714,267
Parker-Hannifin Corp	PH	Industrials	7,632,259,888
Life Technologies Corp	LIFE	Health Care	7,495,218,403
Sara Lee Corp	SLE	Consumer Staples	7,478,026,800
Marriott Intl A	MAR	Consumer Discretionary	7,456,202,253
Boston Properties Inc	BXP	Financials	7,370,790,946
Weyerhaeuser Co	WY	Materials	7,367,898,177
Pepsi Bottling Group Inc	PBG	Consumer Staples	7,298,154,955
Hudson City Bancorp	HCBK	Financials	7,262,200,664
VF Corp	VFC	Consumer Discretionary	7,261,719,311
Computer Sciences	CSC	Information Technology	7,232,701,073
Range Resources Corp	RRC	Energy	7,216,459,388
Lab Corp of America Hldgs	LH	Health Care	7,177,040,636
Expeditors Intl of WA Inc	EXPD	Industrials	7,153,919,603
Xerox Corp	XRX	Information Technology	7,143,846,052
Nvidia Corp	NVDA	Information Technology	7,122,447,979
NYSE Euronext	NYX	Financials	7,072,000,198
Bard C.R. Inc	BCR	Health Care	7,032,303,555
Estee Lauder Cos.	EL	Consumer Staples	7,031,692,525
El Paso Corp	EP	Energy	7,003,034,795
Qwest Communications Intl Inc	Q	Telecommunications Services	6,983,983,482
McAfee Inc	MFE	Information Technology	6,929,622,183
M&T Bank Corp	MTB	Financials	6,891,900,980
Penney J.C. Inc	JCP	Consumer Discretionary	6,876,394,524
Western Digital Corp	WDC	Information Technology	6,867,246,943
Sun Microsystems Inc	JAVA	Information Technology	6,865,522,858
Electronic Arts	ERTS	Information Technology	6,816,272,833
Fifth Third Bancorp (OH)	FITB	Financials	6,807,879,614
Ameriprise Financial Inc	AMP	Financials	6,805,950,136
Cameron International Corp	CAM	Energy	6,676,373,158
IntercontinentalExchange	ICE	Financials	6,633,302,796
Brown-Forman Corp B	BF/B	Consumer Staples	6,602,267,166
Sherwin-Williams Co	SHW	Consumer Discretionary	6,577,063,043
Grainger W.W. Inc	GWW	Industrials	6,511,234,219
Moody's Corp	MCO	Financials	6,510,034,198
Citrix Systems Inc	CTXS	Information Technology	6,491,304,032
Iron Mountain Inc	IRM	Industrials	6,352,406,732
Dover Corp	DOV	Industrials	6,332,322,991
HCP Inc	HCP	Financials	6,326,509,738
BMC Software Inc	BMC	Information Technology	6,313,565,592
Rockwell Collins	COL	Industrials	6,273,610,142
CONSOL Energy Inc	CNX	Energy	6,251,888,212
Mattel Inc	MAT	Consumer Discretionary	6,231,336,261
Goodrich Corp	GR	Industrials	6,217,747,639
Polo Ralph Lauren A	RL	Consumer Discretionary	6,131,442,843
Dr Pepper Snapple Group	DPS	Consumer Staples	6,128,223,697
Questar Corp	STR	Utilities	6,112,807,902
Equity Residential	EQR	Financials	6,079,337,009
Sigma-Aldrich Corp	SIAL	Materials	6,070,512,019
Unum Group	UNM	Financials	6,068,946,907
Smucker J.M. Co	SJM	Consumer Staples	6,019,027,129
Hospira Inc	HSP	Health Care	5,993,830,645
Xilinx Inc	XLNX	Information Technology	5,990,046,051
Linear Technology Corp	LLTC	Information Technology	5,947,808,775
Principal Financial Group	PFG	Financials	5,943,460,713
Vulcan Materials Co	VMC	Materials	5,908,769,669
Fortune Brands Inc	FO	Consumer Discretionary	5,860,722,127
Amphenol Corp A	APH	Information Technology	5,846,090,340
AmerisourceBergen Corp	ABC	Health Care	5,828,335,360
Constellation Energy Group	CEG	Utilities	5,784,535,862
Discover Financial Services	DFS	Financials	5,763,157,670
Leucadia National Corp (NY)	LUK	Financials	5,752,694,972
Wynn Resorts Ltd	WYNN	Consumer Discretionary	5,733,542,461
Intl Game Technology	IGT	Consumer Discretionary	5,715,627,271
DTE Energy Co	DTE	Utilities	5,675,050,296
United States Steel Corp	X	Materials	5,639,904,897
Genuine Parts Co	GPC	Consumer Discretionary	5,639,615,461
Rockwell Automation Inc	ROK	Industrials	5,619,229,171
ENSCO Intl Inc	ESV	Energy	5,612,317,457
Macy's Inc	M	Consumer Discretionary	5,606,148,747
People's United Financial Inc	PBCT	Financials	5,599,349,842
Humana Inc	HUM	Health Care	5,592,348,528
Nordstrom Inc	JWN	Consumer Discretionary	5,584,251,484
Southwest Airlines Co	LUV	Industrials	5,568,270,144
Altera Corp	ALTR	Information Technology	5,565,972,654
Block H & R Inc	HRB	Consumer Discretionary	5,543,389,287
O'Reilly Automotive	ORLY	Consumer Discretionary	5,541,588,243
Ameren Corp	AEE	Utilities	5,471,417,627
Cooper Industries Ltd (Bermuda)	CBE	Industrials	5,454,899,352
Lincoln National Corp	LNC	Financials	5,438,367,105
Expedia	EXPE	Consumer Discretionary	5,430,147,740
CBS Corp B	CBS	Consumer Discretionary	5,429,079,401
Smith Intl Inc	SII	Energy	5,421,256,529
Micron Technology Inc	MU	Information Technology	5,419,806,161
KLA-Tencor Corporation	KLAC	Information Technology	5,388,780,631
Salesforce.com	CRM	Information Technology	5,379,660,170
Host Hotels & Resorts Inc	HST	Financials	5,296,296,138
Fastenal Co	FAST	Industrials	5,256,501,382
Ventas Inc	VTR	Financials	5,218,030,088
Scripps Networks Interactive	SNI	Consumer Discretionary	5,213,984,580
Owens-Illinois Inc	OI	Materials	5,188,266,616
Autodesk Inc	ADSK	Information Technology	5,141,486,642
FMC Technologies Inc	FTI	Energy	5,138,701,948
Harley-Davidson Inc	HOG	Consumer Discretionary	5,106,408,281
Davita Inc	DVA	Health Care	5,090,381,953
Wisconsin Energy Corp	WEC	Utilities	4,996,904,556
Jacobs Engineering Group Inc	JEC	Industrials	4,970,217,573
Plum Creek Timber Co	PCL	Financials	4,965,616,550
Microchip Technology Inc	MCHP	Information Technology	4,951,890,681
Pitney Bowes Inc	PBI	Industrials	4,920,306,639
EQT Corporation	EQT	Utilities	4,909,961,254
Waters Corp	WAT	Health Care	4,905,056,484
Hormel Foods Corp	HRL	Consumer Staples	4,838,719,711
Hartford Finl Services Group	HIG	Financials	4,803,361,634
Nabors Industries Ltd	NBR	Energy	4,791,885,909
AvalonBay Communities Inc	AVB	Financials	4,757,965,142
Masco Corp	MAS	Industrials	4,731,981,027
Metropcs Communications Inc	PCS	Telecommunications Services	4,668,305,214
XL Capital Ltd A (Bermuda)	XL	Financials	4,649,111,872
Regions Financial Corp	RF	Financials	4,645,080,102
Ball Corp	BLL	Materials	4,619,349,623
Quanta Services Inc	PWR	Industrials	4,606,353,268
Darden Restaurants Inc	DRI	Consumer Discretionary	4,595,075,275
Affiliated Computer Services	ACS	Information Technology	4,585,028,089
Dentsply Intl	XRAY	Health Care	4,574,680,767
Varian Medical Systems Inc	VAR	Health Care	4,514,213,390
Stericycle Inc	SRCL	Industrials	4,513,981,710
Family Dollar Stores Inc	FDO	Consumer Discretionary	4,411,086,637
Cephalon Inc	CEPH	Health Care	4,387,826,868
Dun & Bradstreet Corp	DNB	Industrials	4,368,167,782
Health Care REIT Inc	HCN	Financials	4,357,367,988
Tyson Foods Inc A	TSN	Consumer Staples	4,353,518,053
Allegheny Energy Inc	AYE	Utilities	4,336,614,465
SCANA Corp	SCG	Utilities	4,308,868,769
McCormick & Co	MKC	Consumer Staples	4,290,375,657
Starwood Hotel & Resort World	HOT	Consumer Discretionary	4,266,897,307
Red Hat Inc	RHT	Information Technology	4,254,600,515
Harris Corp	HRS	Information Technology	4,192,819,813
KeyCorp	KEY	Financials	4,185,541,500
SLM Corp	SLM	Financials	4,148,623,126
BJ Services Co	BJS	Energy	4,144,494,462
Centerpoint Energy Inc	CNP	Utilities	4,135,012,309
Teradata Corp	TDC	Information Technology	4,127,529,934
MEMC Electronic Materials	WFR	Information Technology	4,125,603,043
Flowserve Corp	FLS	Industrials	4,095,052,693
Nasdaq OMX Group/The	NDAQ	Financials	4,093,079,850
Fidelity National Information	FIS	Information Technology	4,092,859,067
SanDisk Corp	SNDK	Information Technology	4,083,391,800
Whirlpool Corp	WHR	Consumer Discretionary	4,079,720,600
Denbury Resources Inc	DNR	Energy	4,043,910,000
Cincinnati Financial Corp	CINF	Financials	4,025,007,921
Limited Brands Inc	LTD	Consumer Discretionary	4,009,913,142
Northeast Utilities	NU	Utilities	3,991,196,907
Washington Post Co B	WPO	Consumer Discretionary	3,903,803,273
VeriSign Inc	VRSN	Information Technology	3,887,866,348
Legg Mason Inc	LM	Financials	3,886,435,488
Prologis	PLD	Financials	3,864,013,033
CF Industries Holdings	CF	Materials	3,840,718,464
Millipore Corp	MIL	Health Care	3,834,318,493
Mylan Inc.	MYL	Health Care	3,831,341,464
Robert Half Intl Inc	RHI	Industrials	3,788,132,771
Cintas Corp	CTAS	Industrials	3,760,166,915
GameStop Corp A	GME	Consumer Discretionary	3,753,495,474
Windstream Corp	WIN	Telecommunications Services	3,716,770,683
Cabot Oil & Gas A	COG	Energy	3,660,490,596
Watson Pharmaceuticals	WPI	Health Care	3,652,525,961
Hasbro Inc	HAS	Consumer Discretionary	3,638,509,366
Horton D.R. Inc	DHI	Consumer Discretionary	3,612,837,719
Nisource Inc	NI	Utilities	3,610,887,325
Tiffany & Co	TIF	Consumer Discretionary	3,596,902,333
Comerica Inc (MI)	CMA	Financials	3,552,708,983
Akamai Technologies Inc	AKAM	Information Technology	3,534,240,707
Eastman Chemical Co	EMN	Materials	3,515,772,044
Pall Corp	PLL	Industrials	3,507,270,887
AutoNation Inc	AN	Consumer Discretionary	3,483,692,737
Goodyear Tire & Rubber Co	GT	Consumer Discretionary	3,477,439,214
Kimco Realty Corp	KIM	Financials	3,458,678,398
Whole Foods Market Inc	WFMI	Consumer Staples	3,422,444,934
Sealed Air Corp	SEE	Materials	3,406,908,359
Newell Rubbermaid Inc	NWL	Consumer Discretionary	3,406,152,127
National Semiconductor	NSM	Information Technology	3,400,602,689
DeVry Inc	DV	Consumer Discretionary	3,399,919,080
LSI Corporation	LSI	Information Technology	3,367,674,262
Coventry Health Care Inc	CVH	Health Care	3,353,108,270
Dean Foods Co	DF	Consumer Staples	3,340,642,536
Avery Dennison Corp	AVY	Industrials	3,335,893,765
Pactiv Corporation	PTV	Materials	3,319,446,840
Equifax Inc	EFX	Industrials	3,304,095,923
MeadWestvaco Corp	MWV	Materials	3,302,166,179
Torchmark Corp	TMK	Financials	3,301,117,050
Supervalu Inc	SVU	Consumer Staples	3,298,138,373
Pinnacle West Capital (AZ)	PNW	Utilities	3,265,995,100
Textron Inc	TXT	Industrials	3,211,763,754
FLIR Systems Inc	FLIR	Information Technology	3,194,234,246
Centurytel Inc	CTL	Telecommunications Services	3,154,393,373
Pioneer Natural Resources	PXD	Energy	3,150,509,398
Pepco Holdings Inc	POM	Utilities	3,150,258,165
Stanley Works	SWK	Consumer Discretionary	3,127,460,090
Molex Inc	MOLX	Information Technology	3,094,714,824
Assurant Inc	AIZ	Financials	3,047,457,893
Genworth Financial Inc	GNW	Financials	2,993,420,917
Patterson Cos Inc	PDCO	Health Care	2,982,945,919
Constellation Brands Inc A	STZ	Consumer Staples	2,958,524,276
Sunoco Inc	SUN	Energy	2,897,864,342
CMS Energy Corp	CMS	Utilities	2,864,870,504
Donnelley R.R. & Sons	RRD	Industrials	2,852,279,922
Pulte Homes Inc	PHM	Consumer Discretionary	2,787,399,623
CB Richard Ellis Group Inc A	CBG	Financials	2,760,527,898
Intl Flavors & Fragrances	IFF	Materials	2,714,896,080
Allegheny Technologies Inc	ATI	Materials	2,697,750,000
First Horizon National Corp	FHN	Financials	2,697,431,781
Total System Services Inc	TSS	Information Technology	2,695,190,885
TECO Energy Inc	TE	Utilities	2,695,034,182
Bemis Co Inc	BMS	Materials	2,638,240,666
Leggett & Platt	LEG	Consumer Discretionary	2,616,461,964
Federated Investors Inc B	FII	Financials	2,608,689,431
Interpublic Group Cos	IPG	Consumer Discretionary	2,588,089,827
Integrys Energy Group Inc	TEG	Utilities	2,554,897,134
Advanced Micro Devices	AMD	Information Technology	2,515,764,719
Abercrombie & Fitch Company A	ANF	Consumer Discretionary	2,467,588,961
Rowan Companies Inc	RDC	Energy	2,400,628,904
Janus Capital Group Inc	JNS	Financials	2,374,855,225
King Pharmaceuticals Inc	KG	Health Care	2,313,518,096
Tellabs Inc	TLAB	Information Technology	2,297,815,656
Huntington Bancshares (OH)	HBAN	Financials	2,280,652,743
Wyndham Worldwide Corp	WYN	Consumer Discretionary	2,256,247,007
Black & Decker Corp	BDK	Consumer Discretionary	2,248,595,056
IMS Health Inc	RX	Health Care	2,197,920,035
Frontier Communications Corp	FTR	Telecommunications Services	2,189,619,837
PerkinElmer Inc	PKI	Health Care	2,174,172,196
AK Steel Hldg Corp	AKS	Materials	2,079,424,083
Lennar Corp A	LEN	Consumer Discretionary	2,039,814,612
Tenet Healthcare	THC	Health Care	1,953,319,659
Massey Energy Co	MEE	Energy	1,943,870,666
Marshall & Ilsley Corp (WI)	MI	Financials	1,939,886,993
Novellus Systems Inc	NVLS	Information Technology	1,928,732,268
RadioShack Corp	RSH	Consumer Discretionary	1,927,684,172
Jabil Circuit Inc	JBL	Information Technology	1,920,607,369
Snap On Inc	SNA	Consumer Discretionary	1,900,997,340
Big Lots Inc	BIG	Consumer Discretionary	1,900,281,471
Ryder System Inc	R	Industrials	1,892,896,182
Tesoro Corp	TSO	Energy	1,811,112,786
American Intl Group Inc	AIG	Financials	1,796,820,606
Compuware Corp	CPWR	Information Technology	1,755,173,619
Monster Worldwide Inc	MWW	Industrials	1,739,452,764
Dynegy Inc A	DYN	Utilities	1,680,008,952
NICOR Inc	GAS	Utilities	1,659,373,285
Novell Inc	NOVL	Information Technology	1,632,747,288
E*TRADE Financial Corp	ETFC	Financials	1,617,373,553
Zions Bancorp (UT)	ZION	Financials	1,601,219,864
QLogic Corp	QLGC	Information Technology	1,564,328,017
Titanium Metals Corp	TIE	Materials	1,506,811,849
Gannett Co Inc	GCI	Consumer Discretionary	1,506,179,452
KB Home	KBH	Consumer Discretionary	1,476,102,327
Teradyne Inc	TER	Information Technology	1,416,017,767
Harman Intl Industries Inc	HAR	Consumer Discretionary	1,369,694,210
Meredith Corp	MDP	Consumer Discretionary	1,355,834,897
Centex Corp	CTX	Consumer Discretionary	1,295,873,216
Convergys Corp	CVG	Information Technology	1,274,599,526
JDS Uniphase Corp	JDSU	Information Technology	1,251,641,781
Office Depot Inc	ODP	Consumer Discretionary	1,203,194,353
Lexmark International Inc	LXK	Information Technology	1,152,479,711
New York Times Co A	NYT	Consumer Discretionary	1,088,401,852
Apartment Investment & Mgmt	AIV	Financials	1,067,990,291
CIENA Corp	CIEN	Information Technology	1,060,076,022
MBIA Inc	MBI	Financials	910,337,472
Eastman Kodak Co	EK	Consumer Discretionary	893,077,675
Manitowoc Co Inc	MTW	Industrials	768,897,075
Viacom Inc B (New)	VIA	Consumer Discretionary	0

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