Trading Cramer's Lightening Round

Here are Jim Cramer's picks from the March 4th Lightening Round. These picks came out after the market closed on Friday. Here's how they could be traded based on Cramer's sentiment of buy or sell.

American Express Company (AXP)- Cramer Says Buy

This company trades at a forward P/E of 10.72. Cramer says to buy AXP. You could simply buy the shares in the market, or you could enter into a naked put position, selling puts for a lower strike price than the current trading price. If Cramer thinks AXP is a buy at $43.72, he would love to buy it at $41.71 and this is the net cost of buying shares when you sell the $43 April 2011 put at $1.29.

Selling the put will require you to purchase 100 shares at $4,300 if the shares trade below $43 at expiration. In return, you will receive $129 in cash from the premium of the put sale. If the shares trade below $41.71, you lose money on the trade, but anything above this price will be a profit. If the shares stay above $43, you won't be forced to buy the shares. The premium is a 3% yield ($1.29/$43). So, by simply selling the puts and waiting for the price to drop, you are receiving an annualized 26.7% return on your money.

Weatherford International Ltd. (WFT) - Cramer Says Buy

This company recently discovered "material weakness" in their tax accounting. Cramer says this is "wildly overblown" and he recommends a buy on the stock. Frankly, I don't know how easy it would be to trade a stock when short sellers are latching onto a bad news headline. But since Cramer is recommending a buy, I would find a position that is hedged and takes advantage of higher volatility in the options prices.

The forward P/E is 11.83. The price to book ratio is about 1.60. There is a possibility that bad news could send this stock down further, but I believe it will be supported by good valuations. A covered call position looks good here. You could buy 100 share blocks of this stock for $2,059 and sell the $20 April Calls for the bid price of $1.51. If the stock continues to trade above $20 at expiration, you will sell your shares and make $0.92 per share ($20 strike price plus call premium of $1.51 less $20.59 share price). The return on this trade is 4.46% over the next 41 days (39.7% annualized).

If this stock drops below $20, you will keep your shares and the full $1.51 per share premium. Your basis in the stock (not tax basis) will be lowered to $18.49.

Boeing Co. (BA) - Cramer Says Buy

Boeing has had a lot of good news in the press recently, but still trades a modest valuation of 13.60 forward P/E. I like a bull call calendar spread on this stock. This position is created by purchasing a deep in-the-money call option position for a longer term expiration and by selling an out-of-the-money call option at a shorter term expiration.

The $55 January 2013 Call option has an ask price of $20.60. That means the time value premium is only $3.80 ($55 strike price plus the $20.60 options ask price less the current share price of $71.80). Buying this call provides increased leverage for the position and means you're willing to hold long-term.

The $75 April 2011 call has a bid price of $1.08. Selling this call against the $55 January 2013 call creates a cash income yielding of 5.24% on your assets invested over the next 41 days, if the shares are not called. This is an annualized 46.6% return.

If you are able to sell short-term out-of-the-money calls against your shares three to four times before expiration, the entire time value premium of the $55 LEAP position can be offset, thus increasing your leverage and lowering your cost.