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I say "somewhat unpredictable" because the various meltdowns and subsequent rallies have not been incredibly hard to forecast. At this stage, it's anybody's guess if Thursday's rebound will stick. Frankly, it matters little. If you have a time horizon of at least a few months, you can use options to generate income now and establish long positions in stocks that will lead the way, long-term.

I have already suggested ideas on several companies that I think make sense in a market that melts down one day and rises the next. The following three articles present stocks to buy (often via options) or avoid as we experience and prepare to come out of yet another crisis:

In this article, I offer several more selections. Consider a strategy of opening bull put spreads on each and using the credit received to help finance long call positions in the same names.

I suggest a bull put spread because, as several commenters have pointed out in past articles, many investors simply do not have the account equity to cover the sale of a straight put.

When you sell a put, you need cash, margin or a combination of both to cover what it will take to buy shares of the underlying stock if you get put the shares. With a bull put spread, you need much less account equity. Just the difference between the two strike prices at most brokerages.

Company (Ticker) Bull Put Spread Long Call
Public Storage (NYSE:PSA) Sell Aug $110/Buy Aug $100/lower Buy Mar 2012 $100-$125
CBS (NYSE:CBS) Sell Sept $23/Buy Sept $21/lower Buy Jan 2013 $17.50-$25
Amazon.com (NASDAQ:AMZN) Sell Sept $195-$190/Buy Sept $185/lower Buy Jan 2013 from deep ITM to OTM
Best Buy (NYSE:BBY) Sell Sept $24-$22.50/Buy Sept $20/lower Buy Jan 2013 OTM
Lululemon (NASDAQ:LULU) Sell Aug $52.50-$50/Buy Aug $47.50/lower Buy Jan 2013 OTM
Chipotle (NYSE:CMG) Sell Aug $310/Buy Aug $290/lower Buy Jan 2013 from deep ITM to OTM

I have written extensively on most of these stocks, providing a rationale for my bullishness on each. You can access my article history for each name by clicking on the appropriate symbol.

I included bull put spreads for August where the premiums still look attractive. Of course, in each case, you need to consider timing as well as your risk profile and level of bullishness when selecting strike prices and expiration months.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: A Growth and Income Strategy for a Volatile and Somewhat Unpredictable Market