We are long the Nov 15-20 put spread four times, having legged into it for a net debit of 0.35 per spread. That means the most we can lose is $35 per spread, or $140 on the entire position, with the stock trading $19.65 or higher when the November series expires. However, below that price we’ll reap $400 per point, so that with Citi trading $15 or lower, we would come away with a profit of $1,860. One way to even further reduce our premium risk so that no loss is possible would be to naked-short a single extra out-of-the-money put — say, the November 12.50 put — for 1.40. If you work the numbers at expiration with the stock trading anywhere between 0 and 100, you’ll see that no net loss would result overall. Accordingly — and assuming your broker permits it — I’ll recommend offering a Nov 12.50 put (CWZ) short for 1.40, good-till-canceled. Concerning Citi, it’s difficult to predict how the firm’s squabble with Wells Fargo will affect the price of its shares. Whatever happens, we are very likely to make a profit, and if Citi collapses sooner rather than later, it will mean a windfall for us. My hunch is that Wells will buy Wachovia, since it appears to be a real deal rather than a phony like most of the forced takeovers the government has been promoting lately. If the stock slips some more, however, you can try bottom-fishing at 16.60, a promising Hidden Pivot support. Officially, we’ll buy December 17.50 calls (CLR) with the goal of legging into a calendar spread on the expected bounce. _______ UPDATE: We bought four December 17.50 calls for 2.62 and blew them out not long afterward a little less. (2.56 is where I closed them out myself — for a total trading loss, commissions included, of about $32.) We exited the position because our reason for initiating it in the first place — i.e., the expectation of a bounce from 16.60 — failed to materialize. Meanwhile, our November 15-20 put spread is performing nicely today, showing a paper gain of about $240 per spread, or nearly $1,000 total.