US stocks finished sharply lower on Monday by continued fears of further trouble and writedowns at financial institutions. Worries about the economy and the troubled financial system overtook the cheers over the rescue plan for Fannie Mae and Freddie Mac.

Monday started off weak for financial issues as an IMF report predicting that continuing problems in the credit and housing markets would further hurt financial companies.

The Dow Jones Industrial Average fell 239.61 points, or 2.1%, to close at 11,131.08, with all but one of its 30 components trading lower. The S&P 500 was down 23.39 points, or 1.9%, to 1,234.37 and the Nasdaq Composite shed 46.31 points, or 2%, to 2,264.22.

Citigroup share continue to slide further for another two days and my Sept 08 20.0 Puts has made me a profit of $1.70 or 90.9% in just 3 days.

Looking at the overall bearish market sentiments on Friday, I further spotted BAC and MMM and by Monday’s close, just 2 days BAC puts has a profit of $1.07 or 27.3% and MMM puts has a profit of $0.45 or 18%.

Financial stocks should be the focus again in Tuesday as investors assess surprise after-the-bell news from Merrill Lynch that it is issuing $8.5 billion in new equity and selling $30 billion in mortgage assets in a fire sale.

I’ll be sure looking forward for more profits should it continues to slide further as the VIX index is increasing adding more fear to the markets. On the other hand, I’m not worried as all my orders are set in such a way which will stop out hence protecting my profits should the market decide to make a U-turn.

“What if your advisor talks only about returns, not risk? …It’s his job to take risk into account by telling you the range of possible outcomes you face. If he won’t, go to a new planner, someone who will get real” - William F. Sharpe

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