Comments: Ahhh, EWZ, my old friend ... . Selling some put in the October cycle (56 days until expiry) on weakness and high implied volatility, with 30-day at 48.3%.
what concerns me here is VALE on a free fall and it is the biggest company listed on the Brazilian market.
NaughtyPines
⋅
@arthursreis, Good point. Yikes ... . It's like 17.64% of EWZ. That being said, it's rebalanced quarterly, starting in February, so it should be rebalanced in February, May, August, November: etf.com/EWZ
arthursreis
⋅
@NaughtyPines, its a solid company. Even at current price is a cheap Grade A dividend payer. Just picking your brain.
Thanks for responding.
arthursreis
⋅
newbie here, writing cash secured puts?
NaughtyPines
⋅
@arthursreis, Yep. Mostly in exchange-traded funds with >35% 30-day implied volatility.
arthursreis
⋅
@NaughtyPines, i saw another comment of yours and you said you do Max 50% 30-day implied volatility, why not above it?
Thanks
arthursreis
⋅
@NaughtyPines, I'm learning puts and how to roll contracts.
NaughtyPines
⋅
@arthursreis, I like to take profit mechanically at 50% max (i.e., 50% of the credit received). You can naturally evaluate a bunch of additional factors (how much time is left in the contract, whether implied volatility has crushed in, etc.) to see whether it's worth hanging out in the trade/contract past that point and/or whether it's worth rolling/extending duration.
NaughtyPines
⋅
@NaughtyPines, As far as where 30-day implied has to be in order for me to consider a trade, it's generally at >50% for single name, >35% for exchange-traded funds, and >20% for broad market as rules of thumb.