THE WEEK AHEAD: AMD, BA EARNINGS; GDXJ, XOP, SLV PREMIUM SELLING
EARNINGS:
-- PROBABLY PLAYING:
AMD (38/71/15.4%) announces on Tuesday after market close.
BA (25/71/15.1%) announces Wednesday before market open.
Pictured here is an AMD August 21st delta neutral 60/85 short strangle paying 2.93 as of Friday close.
The BA August 21st 150/210 was paying 7.23 at the mid.
Naturally, strikes may need adjustment running into earnings, depending on how prices move in the early part of the week. If of a defined risk bent, look to sell iron condors with break evens wide of the expected move* and that pay greater than one-third the width of the wings. Examples: AMD August 21st 57.5/62.5/80/85, paying 1.99 (a little more aggressive delta-wise than I would usually go, but you've got 5-wides to deal with on the call side, at least as of the writing of this post); BA August 21st 140/150/200/210, paying 3.30 (but prices showing wide in the off hours).
-- WATCHING FOR POTENTIAL RAMP-UP IN IMPLIED:
EBAY (40/46), Tuesday after market close.
SBXUX (22/28), Tuesday after market close.
QCOM (27/46), Wednesday after market close.
PYPL (43/52), Wednesday after market close.
FB (37/46), Wednesday after market close.
AAPL (24/39), Thursday after market close.
GOOG (36/38), Thursday after market close.
XOP (27/43), Frida before market open.
EXCHANGE-TRADED FUNDS ORDERED BY RANK AND SCREENED FOR 30-DAY IMPLIED >35%/AT-THE-MONEY SHORT STRADDLE (SEPTEMBER) PAYING >10% OF THE STOCK PRICE:
SLV (43/54/14.3%)
XLE (27/42/12.5%)
GDXJ (21/56/16.2%)
EWZ (21/48/13.4%)
GDX (18/43/12.8%)
XOP (14/54/15.8%
GDXJ, XOP, and SLV appear to paying the most relative to stock price.
BROAD MARKET ORDERED BY RANK AND SCREENED FOR AT-THE-MONEY SHORT STRADDLE (SEPTEMBER) PAYING >10% OF THE STOCK PRICE:
IWM, SPY, QQQ, and EFA are all paying <10% of the stock price.
IRA DIVIDEND-PAYERS SCREENED FOR 30-DAY IMPLIED >35%/AT-THE-MONEY SHORT STRADDLE (SEPTEMBER) PAYING >10% OF THE STOCK PRICE:
EWZ (21/48/13.4%)
* -- Expected move is generally 85% of what the short straddle price is paying. For example, the BA July 31st 175 short straddle was paying 13.15 as of Friday close. 85% of that is 11.18, so options are pricing in a +/- $11.18 move through Friday's expiry which would's BA's expected move between 162.58 and 184.94.
-- PROBABLY PLAYING:
AMD (38/71/15.4%) announces on Tuesday after market close.
BA (25/71/15.1%) announces Wednesday before market open.
Pictured here is an AMD August 21st delta neutral 60/85 short strangle paying 2.93 as of Friday close.
The BA August 21st 150/210 was paying 7.23 at the mid.
Naturally, strikes may need adjustment running into earnings, depending on how prices move in the early part of the week. If of a defined risk bent, look to sell iron condors with break evens wide of the expected move* and that pay greater than one-third the width of the wings. Examples: AMD August 21st 57.5/62.5/80/85, paying 1.99 (a little more aggressive delta-wise than I would usually go, but you've got 5-wides to deal with on the call side, at least as of the writing of this post); BA August 21st 140/150/200/210, paying 3.30 (but prices showing wide in the off hours).
-- WATCHING FOR POTENTIAL RAMP-UP IN IMPLIED:
EBAY (40/46), Tuesday after market close.
SBXUX (22/28), Tuesday after market close.
QCOM (27/46), Wednesday after market close.
PYPL (43/52), Wednesday after market close.
FB (37/46), Wednesday after market close.
AAPL (24/39), Thursday after market close.
GOOG (36/38), Thursday after market close.
XOP (27/43), Frida before market open.
EXCHANGE-TRADED FUNDS ORDERED BY RANK AND SCREENED FOR 30-DAY IMPLIED >35%/AT-THE-MONEY SHORT STRADDLE (SEPTEMBER) PAYING >10% OF THE STOCK PRICE:
SLV (43/54/14.3%)
XLE (27/42/12.5%)
GDXJ (21/56/16.2%)
EWZ (21/48/13.4%)
GDX (18/43/12.8%)
XOP (14/54/15.8%
GDXJ, XOP, and SLV appear to paying the most relative to stock price.
BROAD MARKET ORDERED BY RANK AND SCREENED FOR AT-THE-MONEY SHORT STRADDLE (SEPTEMBER) PAYING >10% OF THE STOCK PRICE:
IWM, SPY, QQQ, and EFA are all paying <10% of the stock price.
IRA DIVIDEND-PAYERS SCREENED FOR 30-DAY IMPLIED >35%/AT-THE-MONEY SHORT STRADDLE (SEPTEMBER) PAYING >10% OF THE STOCK PRICE:
EWZ (21/48/13.4%)
* -- Expected move is generally 85% of what the short straddle price is paying. For example, the BA July 31st 175 short straddle was paying 13.15 as of Friday close. 85% of that is 11.18, so options are pricing in a +/- $11.18 move through Friday's expiry which would's BA's expected move between 162.58 and 184.94.