NaughtyPines

THE WEEK AHEAD: ORCL, GDXJ, TBT, TLT, SMH, OIH

NYSE:ORCL   ORACLE CORP
EARNINGS

ORCL (50/29) releases earnings on Wednesday after market close, so look to put on a play in the waning hours of Wednesday's New York session.

Pictured here is a non-standard short strangle, with the short call side doubled up in order to compensate for greater than one dollar wide strikes: 1.30 credit, break evens at 48.70/58.15, and delta/theta of -5.52/58.15.

As of Friday close, the June 21st to July 19th monthly volatility contraction is from 46.6% to 29.3% or about 29.7%.

Look to manage intratrade by rolling the untested side toward current price on approaching worthless with a 50% max take profit target.

Generally, I don't play stuff this small that doesn't have dollar wides, since rolling intratrade can be a headache, as can rolling out, since there is limited strike availability. It's really another aspect of liquidity, which is not only about the width of markets intraexpiry, but also about the availability of expiries out in time, as well as strikes.


BROAD MARKET

EEM (27/20)
QQQ (23/20); NDX (24/20)
IWM (23/19); RUT (25/19)
SPY (21/15); SPX (19/15)
EFA (16/13)

With 33 days to go in the July cycle and 61 to go for August, we're kind of in the "in between" for the 45 days 'til expiry sweet spot, so I would wait until August comes closer into view for either broad market or sector if you want to keep things in that 45 days 'til expiry wheelhouse.


SECTOR EXCHANGE-TRADED FUNDS

Top 5 By Rank: GDXJ (62/31), TBT (52/24), TLT (51/12), SMH (50/31), OIH (49/ 40 ).


SINGLE NAME WITH EARNINGS IN THE REAR VIEW

A lot of earnings start kicking off in the July cycle, so would wait to play these as earnings announcement volatility contraction plays instead of wading in here and getting caught in a volatility expansion.


ME PERSONALLY

To keep things simple, mundane, and boring throughout the summer months, I'm looking to just to play broad market for the next couple of cycles -- SPY / SPX , QQQ /NDX, and IWM /RUT. (See, e.g., RUT Sept Iron Condor below).

Comments

all the best
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very good trade
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