VXX SAYS TO HAND SIT UNTIL 25+(?) TO SELL PREMIUM IN INDEX ETF'S
Days like the past several we've had here with plummeting volatility aren't that fantastic for selling premium, at least with respect to the broader market ETF's like SPY, IWM, DIA, and QQQ. That being said, it's nice to get on, say "nope" for the day, check the trades you do have on to see if anything needs to be done, and then bop off and do something else, keeping your powder dry for when that volatility does pop and present a premium selling opportunity.
The reason I've put a question mark behind the "25+" is because I may go for a trade with slightly less than ideal volatility if I haven't got much in terms of trades on and feel that the credit is enough to devote the buying power to.
As a side note, I also checked non-index ETF possibilities (earnings plays are a whole other ball of wax): it's not particularly promising. Here are the top five ETF's ranked by IVR: OIH (55); XOP (49); GDXJ (48); EWZ (45); and ASHR (39). I generally prefer 70+ IVR, but would settle for 50+ in an ETF assuming that the options are liquid (in most cases, a tight bid/ask spread of .05 or less); some of these won't be liquid enough to bother with ... .
The reason I've put a question mark behind the "25+" is because I may go for a trade with slightly less than ideal volatility if I haven't got much in terms of trades on and feel that the credit is enough to devote the buying power to.
As a side note, I also checked non-index ETF possibilities (earnings plays are a whole other ball of wax): it's not particularly promising. Here are the top five ETF's ranked by IVR: OIH (55); XOP (49); GDXJ (48); EWZ (45); and ASHR (39). I generally prefer 70+ IVR, but would settle for 50+ in an ETF assuming that the options are liquid (in most cases, a tight bid/ask spread of .05 or less); some of these won't be liquid enough to bother with ... .
