EARNINGS:
Got a bunch of potentially worthwhile, earnings announcement volatility contraction plays on tap this coming week. Here there are, ordered by "bang for your buck":
AAL (29/99/19.7%), announcing Thursday before market open: Due to its size, I would probably go short straddle or iron fly, with the November 20th 12 short straddle paying 2.46 (19.7% as a function of stock price), and the November 20th 8/12/12/16 four-wide iron fly, paying 2.00 even.
TSLA (29/79/19.1%), announcing on Wednesday after market close. Pictured here is a 10-wide iron condor, with the short option legs set up at the 20 delta. Markets are showing wide in the after hours, but would adjust strikes as necessary to get at least one-third the width of your wings in credit (i.e., 3.33 for a 10 wide, 1.67 for a five, etc.).
SNAP (35/97/17.2%), announcing Tuesday after market close. The November 20th 19 delta 24/35 short strangle was paying 1.35 at the mid price, with the defined risk 22/25/33/36 iron condor paying 1.11.
NFLX (43/62/14.3%), announcing on Tuesday after market close. The November 20th 455/465/635/645 was paying 3.91 at the mid price as of Friday close. As with the TSLA defined risk play, look to adjust strikes as necessary to get at least one-third the width of your wings in credit.
EXCHANGE-TRADED FUNDS, RANKED BY PERCENTAGE OF STOCK PRICE THE NOVEMBER AT-THE-MONEY SHORT STRADDLE IS PAYING AND SCREENED FOR THOSE PAYING GREATER THAN 10%:
XOP (14/55/13.1%)
GDXJ (18/49/12.6%)
SLV (39/50/11.2%)
XLE (26/45/10.2%)
EWZ (15/42/10.0%)
BROAD MARKET:
QQQ (33/35/8.0%)
IWM (29/33/7.2%)
SPY (23/27/5.8%)
EFA (18/22/4.6%)
IRA DIVIDEND EARNERS, RANKED BY PERCENTAGE OF STOCK PRICE THE NOVEMBER AT-THE-MONEY SHORT STRADDLE IS PAYING AND SCREENED FOR THOSE PAYING GREATER THAN 10%:
SLV (39/40/11.2%)*
XLE (26/45/10.2%)
KRE (24/43/10.1%)
EWZ (15/42/10.1%)
MUSINGS:
16 days left until the general election. Out of an abundance of caution, I'm not adding anything here, but may do some "window dressing" rolls of my IWM and QQQ shorts puts I have on in the November 20th expiry just to lock in realized profit, and I'll do an educational post as to what that would entail. Handsitting, thumb twiddling while the markets do their thing is the hardest part ... .
* -- Neither SLV nor GLD pay a dividend.
Got a bunch of potentially worthwhile, earnings announcement volatility contraction plays on tap this coming week. Here there are, ordered by "bang for your buck":
AAL (29/99/19.7%), announcing Thursday before market open: Due to its size, I would probably go short straddle or iron fly, with the November 20th 12 short straddle paying 2.46 (19.7% as a function of stock price), and the November 20th 8/12/12/16 four-wide iron fly, paying 2.00 even.
TSLA (29/79/19.1%), announcing on Wednesday after market close. Pictured here is a 10-wide iron condor, with the short option legs set up at the 20 delta. Markets are showing wide in the after hours, but would adjust strikes as necessary to get at least one-third the width of your wings in credit (i.e., 3.33 for a 10 wide, 1.67 for a five, etc.).
SNAP (35/97/17.2%), announcing Tuesday after market close. The November 20th 19 delta 24/35 short strangle was paying 1.35 at the mid price, with the defined risk 22/25/33/36 iron condor paying 1.11.
NFLX (43/62/14.3%), announcing on Tuesday after market close. The November 20th 455/465/635/645 was paying 3.91 at the mid price as of Friday close. As with the TSLA defined risk play, look to adjust strikes as necessary to get at least one-third the width of your wings in credit.
EXCHANGE-TRADED FUNDS, RANKED BY PERCENTAGE OF STOCK PRICE THE NOVEMBER AT-THE-MONEY SHORT STRADDLE IS PAYING AND SCREENED FOR THOSE PAYING GREATER THAN 10%:
XOP (14/55/13.1%)
GDXJ (18/49/12.6%)
SLV (39/50/11.2%)
XLE (26/45/10.2%)
EWZ (15/42/10.0%)
BROAD MARKET:
QQQ (33/35/8.0%)
IWM (29/33/7.2%)
SPY (23/27/5.8%)
EFA (18/22/4.6%)
IRA DIVIDEND EARNERS, RANKED BY PERCENTAGE OF STOCK PRICE THE NOVEMBER AT-THE-MONEY SHORT STRADDLE IS PAYING AND SCREENED FOR THOSE PAYING GREATER THAN 10%:
SLV (39/40/11.2%)*
XLE (26/45/10.2%)
KRE (24/43/10.1%)
EWZ (15/42/10.1%)
MUSINGS:
16 days left until the general election. Out of an abundance of caution, I'm not adding anything here, but may do some "window dressing" rolls of my IWM and QQQ shorts puts I have on in the November 20th expiry just to lock in realized profit, and I'll do an educational post as to what that would entail. Handsitting, thumb twiddling while the markets do their thing is the hardest part ... .
* -- Neither SLV nor GLD pay a dividend.