This morning I BTC 6 GM Jul08 12.50 Puts and STO 6 GM Sep08 12.50 Puts for a net deposit of $689.01 in my taxable account.  If put to me I would now own these GM shares at 11.11.  GM is trading at 11.46 as I write this.

I sold the Jul08 GM Puts on 5/28 thinking that GM would never get as low as 12.50.  It appeared to be a “safe” Put trade for my taxable account.  It appears that I was wrong.  Of course, the Goldman Sachs downgrade didn’t help at all.  I am suspicious that most of the GM loss today is based on panic.  In fact, much of the overall market loss today may well be based on panic.  If that is true it could well be a sign that the market may really be near a bottom especially when combined with the heavy volume.  A talking head on CNBC just said that she thinks that there is “fear and blood in the streets”.  Commentators in the past have said that we would not really be at a bottom until we see panic and fear and blood in the streets.

As always, time will tell.