With VIX at 27, I got a Nov 6th 170/173/198/201 SPY iron condor filled for a 1.01 credit (again, sorry about not noting the stats). Look for similar setups in IWM, DIA, and QQQ 45 DTE while this little bit of volatility lasts with your short put strike at the 1 SD line and your short call strike at the expected move for the expiry, going 2-3 strikes wide with...
As I continue to look for premium selling plays other than earnings plays, XHB's IVR (currently 71) looks modestly favorable for a premium selling play: This is the play I filled around market open for a .47 credit ... . (Sorry I didn't note any of the stats at the time ... ). Nov 6th 29/31/36/38 Iron Condor
Although we are starting back into another earnings season, I'm just not all that fond of earnings plays; I prefer the relative boredom of index ETF trades or things like sector SPDR's for the generation of steady income as opposed to flash-in-the-plan earnings plays which are generally binary in nature. They either work out quickly and dirtily or go horribly...
"Darn it," you say to yourself when you miss an opportunity and have to wait another "who knows" for it present itself again. Immediately post-FOMC, FXE (the Euro/USD proxy) edged up to the "sweet spot" between 112 and 113, only to quickly retreat again toward 110 -- an opportunity missed to milk the instrument one more time before the end of 2015, by the end of...
With IVR popping its head above 70 in EWZ, premium selling in this ETF is afoot! Example: Nov 6 15/17/24.5/26.5 Iron Condor POP: 69% Max Profit/BPE: .45/contract; 1.55/contract Delta: -3.16/contract Notes: As with most of my trades, I opt for a nondirectional stance with respect to these setups, even though there is some argument to be made that EWZ is at...
With IVR (implied volatility rank) at 69 (ThinkOrSwim 52-Week), OIH offers a premium selling opportunity here. Keep in mind that it is an oil services ETF, so if you already have oil/petroleum/exploration plays on, it would probably be advisable to pass on this trade, since in all likelihood it will be closely correlated with instruments like USO, XLE, and XOP,...
With GPRO nearing its IPO low, I'm looking at an options play that results in my getting assigned the stock -- at the right price, of course. How do you get assigned stock? Basically, you sell a put, and if price is below the strike price of that put at expiration, you are assigned the stock. The converse of this is you sell a call; if price is above the strike...
With volatility rapidly bleeding out of the index ETF's (SPY, IWM, DIA, QQQ), it's not looking so hot for me to set up my weekly mechanical index iron condor, something I usually do on Tuesdays. My cut-off to set these up is IVR (IV Rank) 35 (52 Week TOS), and the index ETF's respective IVR's are currently below that. There's nothing that ruins your day more...
Another tool in the tool box: pairs trading. What is it? It is the trading of closely correlated underlyings at points of unusual divergence and operates on the assumption that the pairs will eventually revert to the historic correlation. GLD and SLV are closely correlated pairs. On the chart below, you'll see that, for the vast majority of the time, GLD and...
Now that FOMC is past, it's time for me to return to bread and butter trades, and these ordinarily are in TLT/TBT and the index ETF's -- SPY, IWM, DIA, and QQQ. Currently, TLT IVR (implied volatility rank) is 42. Although it isn't anything to write home about, TLT (or its inverse, TBT) is one of my bread and butter trades, and I'll put a trade on 25-45 DTE...
As a premium seller, I look to sell premium in high volatility environments or where the volatility in a given underlying (U/L) is high, and I use Dough.com's "Grid" with the drop down menu set to "TastyTrade" to screen for these plays, looking for IVR numbers that exceed 70 for individual stocks and 35 in ETF's, but naturally higher is better ... . However,...
One of the longer-term trades I've got on is in the Euro/USD proxy ETF, FXE. I've posted a bit previously on my approach to FXE, which would be similar to my trading EUR/USD spot -- sell on strength. In FXE's case, I'm looking to sell on a particular flavor of strength, namely price of the underlying's movement back toward 112.5 or, more ideally, above that in a...
Ordinarily, I like to put on what I call a bread and butter trade on a weekly basis in one of the index ETF's (SPY, IWM, QQQ, or DIA) or in the go-to treasury ETF, TLT, as a "new" weekly options expiration becomes available 40-45 days out. With quite a few index and TLT trades queued up in my portfolio that have expirations between next Friday and 35 days out, I...
LULU announces earnings on 9/10 before market open, so look to set up your earnings play prior to the 9/9 NY close to take advantage of the volatility crush the underlying's options will experience post-earnings. Traditionally, I take a nondirectional bias with earnings plays since I do not know how the announcement will turn out and do not know what the market...
If you want to play the Chinese markets, you're largely relegated to FXI or ASHR. So which do you play from an options standpoint? With IVR in FXI at 92 and at a comparable 89 in ASHR, is it a rock, paper, scissors type of decision? I would say "no," and for a very simple reason: liquidity. While FXI isn't great from a liquidity standpoint, ASHR is, quite...
With my broad index ETF (SPY, IWM, DIA, QQQ) queue kind of full, I've been looking at other high volatility plays to keep capital in play. One of the sector ETF's that has reappeared on my radar is IYR (iShares U.S. Real Estate ETF). With an IVR of 85, it is ripe for a premium selling play. Traditionally, I look for a setup that is around 45 DTE, which would be...
Several weeks ago, I began to set up laddered short call verts in FXE (the EURUSD proxy). My original idea was to set up short call verts at 112/115 at varying expiration from here through December or January based upon the notion that the Fed was poised to tighten and, now, it appears, based upon the possibility that the ECB may initiate additional easing. As I...
It is entirely possible that I may have jumped the gun slightly with my UNG seasonality play, as prices continue to hover around the range low that has been in place since late April. However, this may provide an additional opportunity to add to my Jan expiration 12/13 debit spread position at more favorable prices. I am, though, going to continue to watch...