NaughtyPines

IMPLIED VOLATILITY LULL -- A GOOD TIME TO DO HOUSEKEEPING ... .

INDEX:VIX   CBOE Volatility Index
With the CBOE Volatility Index             at 13-ish here, there is nary a premium selling play in the market ... .

Naturally, that can quickly change, but in the mean time, it's "housekeeping time." "Housekeeping time" is a largely boring affair:

1. Look at Setups for Delta Balancing. If you've been reading any of my posts, you'll notice that I largely concentrate on "oppositional" trades, like iron condors and short strangles. While I do look at these frequently to see whether delta balancing should be done (ordinarily by rolling a side toward current price), I'm not always that on top of it because I've got so many setups on. Now's a good time, though, to go through them one by one and see whether a side can be rolled toward current price while keeping the rolled side in a fairly high state of probability of profit and getting "something decent" to do it. With the fees and commissions I pay and the number of contracts I use,* I generally look for at least $25/contract for the roll; otherwise, I don't bother.

2. Look at Setups for "Potential Problem" Areas. Ordinarily, I'm not particularly "proactive" with setups beyond taking advantage of price movement to delta balance by rolling a side toward current price. I let the probabilities play out and look to manage broken sides toward expiry rather than trying to micromanage the setup at every adverse movement that occurs. Sides are going to be broken somewhere, somehow; it's best to just accept that fact and manage it mechanically.

In any event, this low volatility market is an ideal time to devote a little buying power to being slightly proactive on sides that are broken or are on the verge of being broken, since nothing much else is going on.

3. Catch Up on Resource             Materials. Now's the time to catch up on some of your favorite market resources, although the currency of some will have passed. In particular, I like to use these periods to watch archived TastyTrade episodes, particularly the Market Measures segments, and whatever else looks interesting or involves an area in which my knowledge is less than "keen." Naturally, everyone has their favorites resources, and there's no time like the present to catch up on them ... .

4. Resist FOMO ("Fear of Missing Out"). Not putting on trades blows. I generally like to put on a new setup daily, but it simply isn't worthwhile here. But the thing I don't want to do is abandon my guns and put on a sub-par premium selling play "just 'cuz" I have to put something on; that's one of the worst reasons to put on a trade. Regardless of how you trade (scalp, position, swing, etc.), if your setup isn't there, it isn't there. To put a positive spin on it, I'm (1) drying out powder for the next volatility event, when I can pile into stuff to my heart's content; and (2) I'm resting up.

Face it. Having tons of trades on at a time, is, well, just plain ass stressful. Enjoy the time while you can ... .

* -- You'll note that all of my setups are shown as one contract plays. In reality, they're "a bit" more than that and frequently vary by instrument, but I like to show what can be done with just one contract, emphasizing the importance of sizing the trade to your particular account size.
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