NaughtyPines

WITH VIX SUB-15, PREEM SELLING OPPS ARE OUSTIDE BROAD INDICES

TVC:VIX   VOLATILITY S&P 500
As I've posted several times before, my preference generally is to (1) sell premium in broad-based index instruments (e.g., SPY             , IWM             , QQQ             , SPX             , RUT) if VIX             > 15; and (2) if VIX             < 15, look for premium selling opportunities in non-index exchange traded funds with implied volatility of >35% and/or individual underlyings with implied volatility of >50% and where the implied volatility percentage is in the 70th or greater percentile for the preceding 52-weeks. Unfortunately, VIX             <15 here and underlyings -- whether exchange traded funds or individual underlyings -- with implied volatility both in the 52-week 70th percentile and above 50% implied volatility are absent here.

Consequently, I am "settling" for mere >50% implied volatility plays in exchange traded funds and in individual stocks . This isn't ideal, but I'm playing these small, keeping quite a bit of powder dry in the event that volatility does pick up at some point in the weeks ahead.

There are some opportunities out there, and they're where they've been for the past several weeks: in gold             , miners, oil             and gas, and biotech. The top IV individual stocks with liquid options are: NVAX             (195.0) (biotech); RTRX             (132.4) (biotech); GNW             (100.3) (financial); WLL             (80.5) (O&G); CLF             (76.1) (iron ore/mining); AG (75.6) ( silver             miner); CHF (73.9) ( oil             and gas); AKS             (70.0) (steel); EGO (62.7) ( gold             miner); VRX             (61.9) (biotech); AMD             (61.8) (semiconductor); and AUY             (61.6) ( gold             miner). The top IV exchange traded funds are GDX             (43.7) ( gold             miners); and XME             (39.2) (mining).

And, because of the "smallness" of many of these underlyings (many are under $10), I'm taking a slightly different strategic tack here, either doing covered calls from the outset or selling puts as a precursor to a covered call, the notion being in the later case to either keep the premium or get put the stock at a lower price, after which I'll sell calls against. Things like short strangles and iron condors simply will not yield enough premium on setup to bother with in most of these smaller stocks .

In the one play that I currently have on in XME             (see post below) that I could have strangled, I opted to just naked short put to leave open the option of covered calling it if I get put the stock or rolling the short put down and out for additional duration and credit should the underlying move that way rather than dealing with the hassles of call side risk. Naturally, these options would still be open to me were I to strangle, but doing just the short put relieves me of call side risk (there's always trade-offs).

For me personally, I'm looking to move into plays involving something other than gold             , miners, or oil             and gas, since I have quite a few of those on already. Unfortunately, this makes for pretty slim pickings in my little list, with the potential focus being on AMD             and (ick) VRX             . I'm already in NVAX             and GNW             , and I'm not fond of RTRX             (it only offers monthlies and currently the Oct             monthly expiry only offers 2 1/2 wide strikes; naturally, that may change ... ).

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