EARNINGS
No options highly liquid underlyings announcing earnings this week.
BROAD MARKET
EEM (35/19)
QQQ (23/20)
IWM (21/18)
SPY (21/15)
EFA (15/12)
SECTOR EXCHANGE-TRADED FUNDS
There's gold premium to be had (in them there hills ... ), particularly in the miners:
Top 5 By Rank: GDXJ (86/36), GLD(86/16), GDX (63/30), SLV (62/20), XLV (60/15).
Pictured here is a delta neutral GDXJ short strangle in the August expiry, paying 1.28 (.64 at 50% max), break evens at 30.72/40.28, and delta/theta metrics of -2.5/2.9. For those of a defined risk bent, the August 16th 29/32/38/41 is paying .92, with break evens at 31.08/38.92, and delta/theta metrics of 1.08/1.02.
The XLV August 16th 88/97 short strangle is paying 3.10 at the mid, but the markets are so wide, I'm not sure how that'll price out in the New York session. Moreover, the background implied is about that of the broad market (15 versus SPY 15), so I'm unsure of whether that's worth pulling the trigger on even if markets tighten up, even though implied's in the top half of its 52-week range.
IRA TRADES
This has been a tough market if you're looking to acquire either broad market (e.g., SPY), bonds (e.g., EMB, HYG, JNK, TLT), or other divvy generating underlyings (e.g., IYR, XLU), with your basic options being to (a) wait for lower; (b) sell "not a penny more" puts and get paid to wait; or (c) throw some caution to the wind, take some risk, and sell closer to at-the-money and manage those trades reactively (i.e., rolling out for credit, duration, and cost basis reduction). I've opted for a few "not a penny mores," although the return on those isn't all that compelling even though it beats the basically 0% you get for staying in cash. (See, e.g., the HYG, SPY "Not a Penny More" Trades, below). Given my particular proximity to retirement, I'm not all that keen on acquiring a bunch of stuff at near all-time-highs, so I'm pickier and probably way more risk adverse than most, so naturally the "Not a Penny Mores" will not be for everyone since you're tying up quite a substantial piece of cash secured buying power to generate fairly mundane returns.*
But just because I've kind of thrown in the towel over acquiring stuff in the short to medium term doesn't mean I'm not managing what's already there. Inevitably, there's always a covered call that may need to be looked at and/or a hedge that might be sensible to erect to cut covered call net long delta that is inevitably there. (See, e.g., Overwriting Post, below).
* -- Although it's apparent that you can collect sufficient premium to emulate or exceed the dividend returns on some of these underlyings without actually being in the stock itself. It kind of begs the question: "Why be in stock at all?"
No options highly liquid underlyings announcing earnings this week.
BROAD MARKET
EEM (35/19)
QQQ (23/20)
IWM (21/18)
SPY (21/15)
EFA (15/12)
SECTOR EXCHANGE-TRADED FUNDS
There's gold premium to be had (in them there hills ... ), particularly in the miners:
Top 5 By Rank: GDXJ (86/36), GLD(86/16), GDX (63/30), SLV (62/20), XLV (60/15).
Pictured here is a delta neutral GDXJ short strangle in the August expiry, paying 1.28 (.64 at 50% max), break evens at 30.72/40.28, and delta/theta metrics of -2.5/2.9. For those of a defined risk bent, the August 16th 29/32/38/41 is paying .92, with break evens at 31.08/38.92, and delta/theta metrics of 1.08/1.02.
The XLV August 16th 88/97 short strangle is paying 3.10 at the mid, but the markets are so wide, I'm not sure how that'll price out in the New York session. Moreover, the background implied is about that of the broad market (15 versus SPY 15), so I'm unsure of whether that's worth pulling the trigger on even if markets tighten up, even though implied's in the top half of its 52-week range.
IRA TRADES
This has been a tough market if you're looking to acquire either broad market (e.g., SPY), bonds (e.g., EMB, HYG, JNK, TLT), or other divvy generating underlyings (e.g., IYR, XLU), with your basic options being to (a) wait for lower; (b) sell "not a penny more" puts and get paid to wait; or (c) throw some caution to the wind, take some risk, and sell closer to at-the-money and manage those trades reactively (i.e., rolling out for credit, duration, and cost basis reduction). I've opted for a few "not a penny mores," although the return on those isn't all that compelling even though it beats the basically 0% you get for staying in cash. (See, e.g., the HYG, SPY "Not a Penny More" Trades, below). Given my particular proximity to retirement, I'm not all that keen on acquiring a bunch of stuff at near all-time-highs, so I'm pickier and probably way more risk adverse than most, so naturally the "Not a Penny Mores" will not be for everyone since you're tying up quite a substantial piece of cash secured buying power to generate fairly mundane returns.*
But just because I've kind of thrown in the towel over acquiring stuff in the short to medium term doesn't mean I'm not managing what's already there. Inevitably, there's always a covered call that may need to be looked at and/or a hedge that might be sensible to erect to cut covered call net long delta that is inevitably there. (See, e.g., Overwriting Post, below).
* -- Although it's apparent that you can collect sufficient premium to emulate or exceed the dividend returns on some of these underlyings without actually being in the stock itself. It kind of begs the question: "Why be in stock at all?"
