NaughtyPines

NEXT WEEK: IF LAST WEEK WAS SLIM, THIS WEEK IS "SLIMMER" PICKINS

NASDAQ:TMUS   T-Mobile US, Inc
There are a few names popping up on my radar for earnings plays, but when I "look behind the curtain," they aren't that attractive ... .

TEVA , for example, announces on Monday, but it's an ADR, so it could be before market open or after market close or, indeed, not at all, but on some other day. It's tough to put on a volatility contraction play when you don't know exactly when the contraction is going to occur. Moreover, it's biopharm; when it moves, it tends to move big and bigger than you'd want.

BKD has the right metrics -- >70% implied volatility rank, >50% IV, but it's probably too cheap to make a play worthwhile and, moreover, only has monthlies, which can be a pain to work if you need to roll. TMX suffers from the same affliction ... .

TMUS , however, may be worth a play, with implied volatility at the high end of its six-month range and a background implied volatility of 43%. It announces earnings on 2/14 (Tuesday) before market open, so you'll want to put on a play in the final hours of the NY session on Monday if you want in. Preliminarily, the Feb 24th 20-delta short strangle (which currently would be at 58.5/67) would bring in 1.09 credit at the door.

As far as exchange-traded fund plays are concerned, there isn't a single underlying with >70% implied volatility rank (over the previous six months) and >35% IV at the moment, and the broader market instruments ( SPY , IWM , DIA, QQQ ) (I'm basically playing like a broken record here), implied volatility is too low to put on premium selling plays (which is why I've been looking at low vol strats like diagonals to do something there; see Post Below).

For similar reasons, I can't do much with the VIX / VIX derivatives. My experience has been that playing these long is generally unproductive, and I'd have to go out to June to sell a 50-delta short call vert with the short call strike at 16 or above to see the kind of credit I like to get out of these (e.g., the VIX June 17/20 is currently paying .75 at the mid).