NaughtyPines

NEXT WEEK'S NONEARNINGS PLAYS: IT'S A WASTELAND ...

INDEX:VIX   CBOE Volatility Index
... for premium selling

For the first time in quite a bit, I opened my Dough "TastyTrade" grid only to find that there is not a single underlying with an implied volatility rank of greater than 70 (there is one in the "Notable Stocks" grid -- ANF             (see Post below)). There are some that are close ( GDX             , GDXJ             , GG             , EWZ             -- all in the mid to high 60's). Naturally, the volatility in gold             is no big surprise, and EWZ             is perenially in a state of high volatility. I'm already in a GLD             play, and playing a $20 Brazil ETF just doesn't get my motor running.

In a close second is the oil             and gas space with underlyings with ranks between 53 and 64 (in descending order: UNG             , RIG, USO , XOP             , and OIH             ). Again -- no surprise that that's where the volatility's at unless you've been living under a rock the past several weeks.

This state of affairs doesn't present a "shocker moment," really. After all, the VIX             has ebbed off its pre-Feb opex high of 30.90, establishing a new 2016 low of 18.46 on Friday. Comparing the volatility here to the mid-March to late August doldrums we experienced in 2015 (a premium selling "slog," at best), this volatility level isn't horrible, but it isn't that great either.

Naturally, things can change volatility wise in the markets in a relative heart beat. Ordinarily, a lot of premium sellers switch to low volatility strategies such as calendars and diagonals that benefit from an expanding volatility environment when volatility ebbs substantially, but I just don't think we're all that low to be doing that here yet (I'll change my mind if we see VIX             sub-15 and I've got zero plays left on that I put on in higher volatility).

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