We hold a long-term position of 800 shares with an adjusted cost basis of 13.07 and a theoretical profit of $17,600.  One can never be certain exactly where a parabolic rally will crest, but let’s use a Hidden Pivot resistance at 37.16 as a possible target.  This will give us the wherewithal to try to leg into a December 25-30-35 call butterfly spread that would give us cheap protection against a relapse.  To implement this plan, we’ll start by shorting the December 30-35 call spread eight times if and when SLW gets within 10 cents of the target. My rough estimate of how much the spread will be selling for is 3.85, so if you can get that much or more for it, you’ll be doing great; if five cents less, still not too bad.  If we are able to sell the spread, we’ll be looking to buy the December 25-30 call spread on weakness.  Our maximum risk on the short spread alone, assuming a sale at 3.85, would be $115 per spread, but that would be more than doubly offset by our corresponding gain on the long stock position. _______ UPDATE (10:12 a.m. EDT): With a spectacular lunge, SLW made a so-far high today at 37.20(!), pushing the December 30-35 call spread to a maximum price of 4.00.  We’ll use 3.90 as our cost basis for the eight spreads we shorted, and for the time being do nothing further.  If we leave things as they are, the spread gives us 100% protection down to about $33. _______ FURTHER UPDATE: I see that someone in the chat room has reported a 3.80 fill on the spread — 20 cents lower than the highest do-able price — so that’s the number we’ll use for our cost basis.  The defensive short sale is not looking too shabby at the moment, since SLW has pulled back pretty hard from the 37.20 high to a so-far low at 35.43.  Going forward, if we can buy the Dec 25-30 call spread for 3.80, that will mean we’ll have legged on the ‘fly for zero (no cost).  That would yield a $4000 gain at $30/share, more than offsetting the loss we would suffer riding our 800 shares of stock from today’s 37.20 high down to $30. Our upside exposure, meanwhile, would be zilch, since the spread will have cost us nothing, and because we would not be net short any contracts above $35 (i.e, long one Dec 25 and one Dec 35 call, short two Dec 30s.)