THE WEEK AHEAD: GDXJ, XOP, EWZ PREMIUM SELLING
Although there are quite a few earnings announcements up next week, none of them appear particularly attractive from both a volatility metric standpoint as well as a liquidity standpoint.
For instance, MYL (78/46), EA (73/50), and ROKU (65/82) all have the right volatility metrics, but when you go to work setups, you're confronted with non-$1 wide strikes, not something you want to see if you need to roll out in time for duration ... .
Consequently, you're left with looking at either single name with earnings in the rear view mirror or exchange-traded funds.
On the exchange-traded fund end of things, GDXJ (51/28), ASHR (41/26), IYR (38/13), OIH (35/33), and GDX (34/23) round out the top five by rank; OIH (35/33), XOP (30/31), EWZ (15/28), GDXJ (51/28), and ASHR (41/26) round out the top five when sorted by 30-day.
Pictured here is a GDXJ short strangle in the June cycle (47 days 'til expiry) that's paying 1.14 (.57 at 50% max) with break evens of 25.86/31.84 and delta/theta metrics of -3.21/2.12. Alternatively, the June 21st 29 short straddle is paying 2.36 (.59 at 25% max), break evens of 26.64/31.36 and delta/theta metrics of 11.96/2.35.
The XOP June 21st 28/32 short strangle camped out around the 30 delta pays 1.16 (.58 at 50% max) with break evens of 26.84/33.16 and delta/theta metrics of 2.87/2.30.
The EWZ June 21st 38/44 25 delta short strangle is paying 1.30 (.65 at 50% max) with break evens at 36.70/45.30 and delta/theta metrics of -1.42/2.84.
For instance, MYL (78/46), EA (73/50), and ROKU (65/82) all have the right volatility metrics, but when you go to work setups, you're confronted with non-$1 wide strikes, not something you want to see if you need to roll out in time for duration ... .
Consequently, you're left with looking at either single name with earnings in the rear view mirror or exchange-traded funds.
On the exchange-traded fund end of things, GDXJ (51/28), ASHR (41/26), IYR (38/13), OIH (35/33), and GDX (34/23) round out the top five by rank; OIH (35/33), XOP (30/31), EWZ (15/28), GDXJ (51/28), and ASHR (41/26) round out the top five when sorted by 30-day.
Pictured here is a GDXJ short strangle in the June cycle (47 days 'til expiry) that's paying 1.14 (.57 at 50% max) with break evens of 25.86/31.84 and delta/theta metrics of -3.21/2.12. Alternatively, the June 21st 29 short straddle is paying 2.36 (.59 at 25% max), break evens of 26.64/31.36 and delta/theta metrics of 11.96/2.35.
The XOP June 21st 28/32 short strangle camped out around the 30 delta pays 1.16 (.58 at 50% max) with break evens of 26.84/33.16 and delta/theta metrics of 2.87/2.30.
The EWZ June 21st 38/44 25 delta short strangle is paying 1.30 (.65 at 50% max) with break evens at 36.70/45.30 and delta/theta metrics of -1.42/2.84.