CME Group (NASDAQ: CME - option chain) is one of the few stocks rising today after an article in the latest Barron's called CME one of its top picks to weather the current storm, because it can generate a lot of cash in a tight credit environment. Even if CME doesn't rise in the next few months, this kind of sentiment could help the stock at least maintain its current price. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CME.

CME opened this morning at $358.00 So far today the stock has hit a low of $353.63 and a high of $384.99. As of 12:35, CME is trading at $371.00, up $8.70 (2.4%). The chart for CME looks neutral and S&P gives CME a 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $280 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.5% return in just two weeks as long as CME is above $280 at October expiration. CME would have to fall by more than 24% before we would start to lose money. Learn more about this type of trade here.

CME hasn't been below $282 at all in the past year and has shown support around $350 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in CME.

Barron's takes a blistering look (subscription required) at Bidz.com (NASDAQ: BIDZ) and its executives' long history of relations with shady characters and, possibly, organized crime. You can read the Barron's piece for all the details but here are some key words: fencing, gambling, fencing, strip clubs, "oral copulation with a person under 14 through force or fear," porn shops, prostitution, etc.

But wait: does any of that really matter? There's an argument to be made that if the company is solidly profitable, which it appears to be, and has reasonably sound corporate governance practices, then all those past relationships are just noise that, if anything, present a buying opportunity.

The problem, to me at least, is that there's plenty of other stuff at Bidz that doesn't quite add up. Back in March, ex-con turned fraud fighter Sam E. Antar raised questions about the company's accounting on his blog, and Andrew Left also seems to focus on the company's inventory issues.

Without getting into financial jargon, I can't figure out what makes Bidz so special: it reports strong sales and earnings -- much stronger returns than industry leader Blue Nile (NASDAQ: NILE) -- and Bidz's website is incredibly unimpressive. When you look at the quality of the site and then compare it to the impressive financials, something smells bad. Caveat emptor.

Were you wondering which sector of the U.S. economy would be next to take a dive from the year-old credit crunch? Well look no further, because Barron's [subscription required] reports that private equity firms like Apollo Global Management, Kohlberg Kravis Roberts, and Blackstone Group (NYSE: BX) are hurting gators thanks to too much borrowed money and the weak financial performance of the companies they bought. And business is way down, Barron's reports that through mid-August, the 2008 total deal volume "stood at $67 billion, versus more than $400 billion in the corresponding 2007 period."

This does not come as a surprise to me. In February 2007, I appeared on CNBC arguing that private equity had peaked. And I began to question its long-term viability back in August 2006 when Barron's Alan Abelson quoted my thoughts on the matter. The basic problem is that when debt is cheap, private equity booms and when it starts selling itself to the public, investors should hold onto their wallets for dear life. People who own private equity firms tap their superior knowledge of the coming downturn to convince the public to bail them out by buying their stock.

Barron's cites -- as evidence of trouble in private equity land -- examples of the declining value of the publicly traded debt in companies that private equity took private at too-high prices with too much borrowed money. It writes that bonds of "many companies taken private in the past two years have plunged to 50 cents on the dollar or less, signaling that investors fear they won't be fully repaid. Many companies that were the subjects of buyouts a year or two ago are so grossly over-leveraged that they're struggling simply to pay interest. If they were to default, debt investors would be stung, but equity investors would be even worse off; the value of their holdings would be deeply impaired or wiped out."

TheStreet.com's Jim Cramer says news is not being properly disseminated, and some people are getting an unfair edge.

I love how easily I am misunderstood by people who have about one-tenth the history I have in the markets. I love it, because their dogmatic criticism of me is so unfounded and anti-historical, not to mention totally un-rigorous, that I get a kick out of reading it.

I am talking, of course, about the outrageous trading in Fannie (NYSE: FNM) (Cramer's Take) and Freddie (NYSE: FRE) (Cramer's Take) over the last few days.

My beef: For most of the last 80 years, when there was "unusual activity" in a stock, as you would certainly have to say there has been here, the New York Stock Exchange or the company or even the SEC would call a halt in trading, the reason being that it is clear there is news that is not being properly disseminated. Halting trading is something that is done to level the playing field, to be sure that some don't know something that others don't.

Here the disinformation has been so ludicrous, the lack of disclosure so ridiculous, the misdirection so nonstop that it is simply inconceivable that everyone has the same information available to trade on. That's the darned law, for heaven's sake. It isn't something I made up. We aren't supposed to have situations where some know information and others don't. Given the nature of the talks involving so many parties and the leaks that are happening left and right, does this feel like a place where the average investor is getting a fair shake? I don't think so. How anyone could even disagree with that notion is the height of naiveté.

Broadcom (NASDAQ: BRCM - option chain) shares are moving higher today after an article in Barron's over the weekend said the stock could rise as much as 40 percent as the chipmaker enters the market for smartphones. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BRCM.

BRCM opened this morning at $28.23. So far today the stock has hit a low of $27.76 and a high of $28.39. As of 12:20, BRCM is trading at $27.86, up 40 cents(1.5%). The chart for BRCM looks bullish and S&P gives BRCM a positive 4 STARS (out of 5) buy ranking.

For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $20 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 13.6% return in just three months as long as BRCM is above $20 at November expiration. Broadcom would have to fall by more than 27% before we would start to lose money. Learn more about this type of trade here.

BRCM hasn't been below $20 since April and has shown support around $23 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in BRCM.

This week's Barron's (subscription required) finally had Intuitive Surgical (NASDAQ: ISRG) on its cover, and cover it it did, but with a wet blanket.

The stock is down in early trading today, but that is probably warranted given the runup last week when it jumped $52 in one day after it reported one more mind boggling quarter. I only exaggerate slightly as the company beat estimates by 10 cents a share and increased margins in all areas, when I reported then, Chasing Value: Intuitive Surgical beat the street AGAIN!

The Barron's story, Surgical Robot Cuts Both Ways by Andrew Barry questions the stock's valuation and the company's projections of expanding sales and service figures.

Mr. Barry points out that the stock is trading at sky high valuations and that any disappointment could result in a 25% drop in the stock price. I would remind ISRG fans and stock watchers that this has happened on many occasions without any bad news. It had reached a high around $360 per share and then traded down until it took a dive into the $240s when Wall Street decided that the slowing economy and tighter fiscal restraint on the part of hospital administrators would dampen ISRG's prospects in the second half of 2008.

Back in the early 1990s, the U.S. was mired in a recession and the money center banks were in dire straits. But, of course, it was a great opportunity for investors.

So, are we seeing a repeat? Perhaps so, although, you still need to tread carefully. This is according to a front-page piece in Barron's [a paid publication].

And yes, this week has been particularly encouraging, as seen with a widespread rally in the financials. It certainly helped that there was strength from Wells Fargo (NYSE: WFC) and JPMorgan (NYSE: JPM). At the same time, the results from Citigroup (NYSE: C) weren't as bad as expected.

By any measure -- such as price-to-book values and P/Es -- the financials look extremely cheap. Besides, these companies are taking quick medicine in terms of write offs. In other words, once financials report next year, the comparisons should look strong.

Something else: the Securities and Exchange Commission has implemented new rules on short selling (regarding 19 financial companies). Ultimately, this may relieve some of the volatility.

So what are some interesting possible investments? Barron's mentions a variety of companies, such as JPMorgan Chase, Lehman Brothers (NYSE: LEH), Bank of New York Mellon (NYSE: BK), Wells Fargo, and PNC Financial (NYSE: PNC). Though it might be smart to avoid companies like Fannie Mae (NYSE: FNM), Freddie Mac (NYSE: FRE) and Washington Mutual (NYSE: WM).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

NASDAQ OMX (NASDAQ: NDAQ) shares are trading higher today after an analyst at Barron's said the stock is undervalued, adding there is "an extraordinary opportunity" to buy NDAQ at a discount. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NDAQ.

After hitting a one-year high of $50.47 in November, the stock hit a one-year low of $22.76 last week. NDAQ opened this morning at $27.14. So far today the stock has hit a low of $24.57 and a high of $27.20. As of 1:00, NDAQ is trading at $24.81, up $0.48 (2.0%). The chart for NDAQ looks bearish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $20 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 13.6% return in just five weeks as long as NDAQ is above $20 at August expiration. NDAQ would have to fall by more than 19% before we would start to lose money.

NDAQ hasn't been below $22.50 at all in the past year and has shown support around $23 recently. This trade could be risky if the company's earnings (due out 8/6) disappoint, but even if that happens, this position could be protected by the support the stock might find around $22.50 where it has bottomed thus far.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in NDAQ.

I've lived through the internet bubble (and have some scars) and tried to avoid the real estate bubble (it wasn't easy). But, bubbles have a way of being painful and longlasting.

So, no doubt, the real estate bubble has been painful (may be the worst market for at least the past 50 years). But, could this be a short-run thing?

Perhaps so. In fact, this is the view from the front-cover piece in this week's Barron's [a paid publication]. Actually, there may be the start of a real estate recovery by the end of this year.

This is certainly a controversial stand. Keep in mind that inventory levels are stubbornly high (helped by foreclosures) and housing prices seem to fall further and further. What's more, the credit crunch is still here and there are serious problems with major real estate operators, such as with the implosion of IndyMac Bancorp (NYSE: IMB), as well as the deterioration of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).

OK, so why the optimism? Well, if you peel back some of the recent housing data, it appears that things are stabilizing in terms of home sales and inventories. Basically, market forces are making the necessary adjustments.

Barron's [subscription required] has put a number on just how little capital Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) have on their balance sheets to protect investors in case of trouble. The simple answer is that they have a sliver of capital so thin that it would take a tiny drop in the value of their assets to wipe it out.

That capital sliver is probably not sufficient to protect public shareholders. Barron's excerpts a June 2008 report from Porter Stansberry who notes that Fannie and Freddie have mortgages with a face value of $1.7 trillion, supported by assets of about $70 billion in core capital. When combined, they have $1 of capital for every $24 of equity -- but the kicker is that when off-balance sheet guarantees are added in, their capital plunges to $1 for every $68 in assets and liabilities.

Stansberry is not sanguine about the future of Fannie and Freddie -- he thinks their stocks will hit $0. Why? Many reasons: He notes that foreclosures and delinquencies are climbing, housing prices have already fallen 15% and 10% of homes built after 2000 are vacant. And he estimates that 25% to 40% of their mortgages may be under water.

A recent Barron's had a cover story featuring General Motors (NYSE: GM) which I have been pondering for a while. Somehow the story did not get me all that excited despite the boldness of the headline reading "BUY GM."

More attuned to the words that followed -- "GM is a risky bet" -- I wondered why they would not feature something with possibly equal potential and far less risk. If you read the journal cover to cover, you might have taken note of the fact that there were two articles highlighting General Electric (NYSE: GE).

In the first, Michael Santoli extols the virtues of owning GE compared to a 10 year Treasury note which offers security but no upside potential. He mentions the high yield, low P/E, strong businesses and the fact that current CEO Jeffrey Immelt bought shares in the open market for $3.5 million.

Regular readers know that I enjoy Barron's Weekly (subscription required) one of the best business journals around and that it has provoked some of my better investment ideas. However, even Barron's can fall prey to bad or incomplete reporting, (as if there were a difference), as they benefit from market activity and can stretch an idea too far, becoming all too common.

Barron's incomplete and common story was in the June 9, 2008 issue titled "Timing is Everything". What I find common, and thus objectionable, is the fact that they choose to tout Appel Asset Management's like so many brokerage houses do numerous funds (for the fees), ignoring basic tidbits like said fees, and taxes. The Appels seem to do an admirable job for their investors but they do not beat the indices, so who cares?

Their simple strategy is to invest in the two broadly based hot ETF's, counting on momentum lasting more than one quarter, and switch them out each quarter. This they claim takes only an hour of work every three months, how lovely. In the story they state "From 1979 through 2007, Marvin Appel would have (emphasis mine) returned 16% a year, before fees, better than the 15% a year performance of the Russell 2000 Value Index". They also leave out how long the approach has actually been in place.

Barron's reports on Wednesday's Ira W. Sohn Investment Research Conference in New York. While many different stocks were pitched I thought it was interesting that two speakers presented both sides of the Citigroup Inc. (NYSE:C) investment case. The short case is that Citi shouldn't pay dividends while raising capital and the long case is a $5 EPS forecast for 2009.

Former mutual-fund star Michael Price said Citi was foolish to be paying dividends while raising enormous amounts of capital. He also said that Citi's perpetual preferreds have nowhere to go but down. Rich Pzena of Pzena Investment Management was long Citi because he thinks its earnings power is largely unimpaired and that it could net over $5 a share in 2009 -- making it look cheap at its current $21 a share price.

I would like Pzena to be right. But I find Citi's financial statements to be so complex that I don't understand how he arrived at that $5 a share forecast. Nevertheless, I continue to hold the stock because I think that the pressure to fix Citi is so great that eventually someone will figure out how to do it. I think it should be split into two.

Barron's [subscription required] summarizes the likely fate of different classes of Auction Rate Securities (ARS) holders -- the $330 billion market for securities that used to reset in weekly auctions before it froze up in February. It reports that If you hold ARSs sold by a municipality or a taxable, closed-end mutual fund you may already have gotten your money back or may do so within weeks. And those holding issues from tax-free, closed-end municipal-bond funds will likely see some money back before long. But others may have a long wait ahead.

I first wrote about this in February and since then, the post has accumulated 4,031 comments. I cannot imagine how difficult it must be for these people to think they had their money in a safe, money-market like fund -- only to discover that they could not get access to their money at all. It appears that many of these ARS holders did not receive a prospectus and were not warned that the auctions could fail.

Meanwhile, here's Barron's prognosis for the different classes of ARS holders:

• Municipal Issuers. Issuers like cities and toll roads had about $165 billion of the ARS market. Bloomberg estimates that north of $63 billion of municipal ARS have been refinanced, and that ARS holders were bought out without losing any money. About half of the municipal auctions are working again, with interest rates in the 4% to 5% area.

Not many software companies can survive 30 years. But, that's what Oracle (NASDAQ: ORCL) has been able to do.

In fact, according to a cover piece in Barron's [a paid publication], it looks like the company may be poised for continued success.

The company's CEO and co-founder, Larry Ellison, is a legend in the software business. He has battled with biggies like IBM (NYSE: IBM), SAP (NYSE: SAP) and Microsoft (NASDAQ: MSFT). He has also conquered a variety of database operators.

But, Ellison has also been bulking up his company with savvy acquisitions, such as PeopleSoft, Siebel and BEA Systems (spending over $30 billion on dealmaking since 2005). Basically, he believes that business software is a fairly mature business and needs consolidation. What's more, the business is highly sticky. That is, once you implement an ERP system or database platform, it's pretty tough to make a change.

So far, the results have been solid. Over the past year, operating margins have gone from 36% to 42%. Then again, Oracle has benefited from economies of scale, such as with R&D, sales, customer support, and so on.

What's more, Oracle has lots of cross-sale opportunities. In fact, software licenses are up 29% to $4.4 billion. Keep in mind that this will be a source of future growth because of the ongoing maintenance fees.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.