THE WEEK AHEAD: HAL, NFLX, AA, UAL EARNINGS; EWZ, XLE, SLV, IWM
HIGHLY LIQUID OPTIONS SINGLE NAME EARNINGS (LISTED CHRONOLOGICALLY IN ORDER OF ANNOUNCEMENT AND SCREENED FOR >50% 30-DAY IMPLIED):
HAL (13/61/13.9%),* Tuesday, before market open
NFLX (25/50/11.3%), Tuesday, after market close
AA (18/69/15.9%), Wednesday, after market close
UAL (13/64/14.8%), Wednesday, after market close
From a bang for your buck perspective: AA ranks first, UAL, second, followed by NFLX, and HAL.
I already have a covered strangle on in UAL and don't anticipate putting on more single name risk in the IRA (which is my primary focus running into retirement), but will naturally post a play should I get into one.
EXCHANGE-TRADED FUNDS WITH >35% 30-DAY AND RANKED BY THE PERCENTAGE THE FEBRUARY AT-THE-MONEY SHORT STRADDLE IS PAYING AS A FUNCTION OF STOCK PRICE:
EWZ (18/45/10.3%)
XLE (23/42/9.7%)
SLV (25/42/9.4%)
GDX (12/38/9.2%)
XBI (18/37/8.7%)
KRE (16/36/8.7%)
EWW (15/36/7.5%)
I'm already in everything here but for KRE and EWW (the lowest bangs for your buck on the list) and the February monthly is a bit short in duration here for me (34 days) and March a tad long (62 days), so I may not do much this week in these, although going out to March with another rung in my GDX, SLV, and XBI positions isn't out of the question.
BROAD MARKET RANKED BY 30-DAY IMPLIED:
IWM (24/32/6.8%)
QQQ (22/30/6.4%)
SPY (16/24/4.8%)
DIA (13/23/4.6%)
EFA (14/20/3.8%)
In spite of the fact that IWM and/or RUT have the higher 30-day, I may look at adding a July (181 days) rung to the SPY short put ladder I have on in the IRA, targeting the strike paying at least 1% of the strike price in credit (which would currently be something like the 240), and do the kind of "opportunistic rolling" I've been doing with shorter duration rungs. (See Post Below). Although most frown upon going out this far in time, it's a way to deploy otherwise underutilized buying power that will earn something >0% while I work shorter duration setups or wait for a higher implied volatility environment and/or greater weakness. Additionally, my goals for the IRA are somewhat modest from a return on capital standpoint: I'm not looking to hit homers or be an incredibly attentive investor, opting for a once a week or even a once a month schedule of looking at things, making adjustments as appropriate, and/or taking off stuff approaching worthless that doesn't merit hanging onto due to the amount of time left in the contract.
* -- The first metric is the implied volatility rank or percentile (i.e., where the 30-day is relative to where it's been over the last 52 weeks); the second, thirty day implied; and the third, the percentage the at-the-money short straddle in the February monthly is paying as a function of stock price.
HAL (13/61/13.9%),* Tuesday, before market open
NFLX (25/50/11.3%), Tuesday, after market close
AA (18/69/15.9%), Wednesday, after market close
UAL (13/64/14.8%), Wednesday, after market close
From a bang for your buck perspective: AA ranks first, UAL, second, followed by NFLX, and HAL.
I already have a covered strangle on in UAL and don't anticipate putting on more single name risk in the IRA (which is my primary focus running into retirement), but will naturally post a play should I get into one.
EXCHANGE-TRADED FUNDS WITH >35% 30-DAY AND RANKED BY THE PERCENTAGE THE FEBRUARY AT-THE-MONEY SHORT STRADDLE IS PAYING AS A FUNCTION OF STOCK PRICE:
EWZ (18/45/10.3%)
XLE (23/42/9.7%)
SLV (25/42/9.4%)
GDX (12/38/9.2%)
XBI (18/37/8.7%)
KRE (16/36/8.7%)
EWW (15/36/7.5%)
I'm already in everything here but for KRE and EWW (the lowest bangs for your buck on the list) and the February monthly is a bit short in duration here for me (34 days) and March a tad long (62 days), so I may not do much this week in these, although going out to March with another rung in my GDX, SLV, and XBI positions isn't out of the question.
BROAD MARKET RANKED BY 30-DAY IMPLIED:
IWM (24/32/6.8%)
QQQ (22/30/6.4%)
SPY (16/24/4.8%)
DIA (13/23/4.6%)
EFA (14/20/3.8%)
In spite of the fact that IWM and/or RUT have the higher 30-day, I may look at adding a July (181 days) rung to the SPY short put ladder I have on in the IRA, targeting the strike paying at least 1% of the strike price in credit (which would currently be something like the 240), and do the kind of "opportunistic rolling" I've been doing with shorter duration rungs. (See Post Below). Although most frown upon going out this far in time, it's a way to deploy otherwise underutilized buying power that will earn something >0% while I work shorter duration setups or wait for a higher implied volatility environment and/or greater weakness. Additionally, my goals for the IRA are somewhat modest from a return on capital standpoint: I'm not looking to hit homers or be an incredibly attentive investor, opting for a once a week or even a once a month schedule of looking at things, making adjustments as appropriate, and/or taking off stuff approaching worthless that doesn't merit hanging onto due to the amount of time left in the contract.
* -- The first metric is the implied volatility rank or percentile (i.e., where the 30-day is relative to where it's been over the last 52 weeks); the second, thirty day implied; and the third, the percentage the at-the-money short straddle in the February monthly is paying as a function of stock price.
