Romney Scares Coal Shorts (Video)

| About: Arch Coal (ARCH)

Mitt Romney is scaring coal shorts including Arch Coal (ACI), Peabody Energy (BTU), Alpha Natural Resources (ANR), Cloud Peak Energy (NYSE:CLD), and James River (JRCC).

Romney says "I like coal" and has indicated he would scale back some of the EPA regulations of the Obama administration. A win for him would surely see coal stocks surge and shorts would be scrambling to cover their positions. As such, as long as Mitt has a chance to win, the coal stocks downside should be limited as they were already priced for an Obama re-election.

This presents an opportunity to game not a Romney victory, although that has some delicious possibilities, but to game Romney keeping the coal shorts at bay until the election is over. Our suggestion to game this Romney-floor is to sell cash-secured puts on coal names like Arch.

Dive in and sell puts to take advantage. Check out our articles on selling puts to get some background:

Disclosure: I am long ACI. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.