The Week Ahead: ARKK, ARKG, GDXJ, MJ, XBI, XLE, X, CLF, SAVE, F
Here's where the premium was at as of Friday's close:
Broad Market Exchange-Traded Funds With 30-Day Implied >20%:
IWM (1/23)
Comments: I have quite a bit of IWM on here, but my order of preference is broad market, then sector, then single name, so am comfortable with adding if we get both weakness and a pop in volatility. IWM/RUT has been fairly rangebound, so it's worthwhile to pop open a chart and see where the bottom of the range is and where any puts you sell are relative to the range between 210 and 235.
Sector Exchange-Traded Funds With 30-Day Implied > 35%:
ARKK (31/45)
ARKG (18/41)
GDXJ (0/40)
MJ (7/40)
XBI (12/38)
XLE (2/36)
Comments: I've got ARKK, ARKG, and MJ July monthlies on, so I may look to add some GDXJ, even though its implied volatility is literally at the bottom of the 52-week range (which is still afflicted by the 2020 pandemic range, so implied volatility rank/percentile aren't all that helpful here), and it isn't exactly weak relative to where it's been. MJ and XBI are currently the most weak out of the group, so I'm personally leaning toward putting on some more XBI, having taken have a June trade last week.
Single Name With 30-Day >50% That Do Not Have Earnings Before Contract Expiry:
X (Steel) (9/74)
CLF (Basic Materials) (18/73)
SAVE (Airlines) (2/55)
F (Autos) (19/55)
OXY (Oil and Gas) (8/53)
SABR (Airlines; Technology) (25/51)
MRO (Oil and Gas) (0/50)
Comments: Given the slim pickings in the broad market and exchange-traded funds space, I've made a list of options highly liquid single name to potentially play while I wait for broad market or sector volatility to return. This list isn't exhaustive, and I've culled out a ton of meme names that have juicy implied volatility but are more likely to become a headache because they're (ironically) too volatile or they're in a space where they're more likely to blow up in my face (e.g., biopharma research and development, crypto).
Pictured here is an X July 16th 22 Short Put (20 delta), paying .74/contract as of Friday close, 3.48% ROC at max/27.6% annualized. As you can see, that play is somewhat close to price action of late, so I'd only put that play on if you're comfortable with potentially taking assignment at 22 and then wheeling it from there. Alternatively, opt for a setup that is consistent with any directional assumption you have as to where U.S. Steel goes from here and that takes advantage of the high implied here.
Broad Market Exchange-Traded Funds With 30-Day Implied >20%:
IWM (1/23)
Comments: I have quite a bit of IWM on here, but my order of preference is broad market, then sector, then single name, so am comfortable with adding if we get both weakness and a pop in volatility. IWM/RUT has been fairly rangebound, so it's worthwhile to pop open a chart and see where the bottom of the range is and where any puts you sell are relative to the range between 210 and 235.
Sector Exchange-Traded Funds With 30-Day Implied > 35%:
ARKK (31/45)
ARKG (18/41)
GDXJ (0/40)
MJ (7/40)
XBI (12/38)
XLE (2/36)
Comments: I've got ARKK, ARKG, and MJ July monthlies on, so I may look to add some GDXJ, even though its implied volatility is literally at the bottom of the 52-week range (which is still afflicted by the 2020 pandemic range, so implied volatility rank/percentile aren't all that helpful here), and it isn't exactly weak relative to where it's been. MJ and XBI are currently the most weak out of the group, so I'm personally leaning toward putting on some more XBI, having taken have a June trade last week.
Single Name With 30-Day >50% That Do Not Have Earnings Before Contract Expiry:
X (Steel) (9/74)
CLF (Basic Materials) (18/73)
SAVE (Airlines) (2/55)
F (Autos) (19/55)
OXY (Oil and Gas) (8/53)
SABR (Airlines; Technology) (25/51)
MRO (Oil and Gas) (0/50)
Comments: Given the slim pickings in the broad market and exchange-traded funds space, I've made a list of options highly liquid single name to potentially play while I wait for broad market or sector volatility to return. This list isn't exhaustive, and I've culled out a ton of meme names that have juicy implied volatility but are more likely to become a headache because they're (ironically) too volatile or they're in a space where they're more likely to blow up in my face (e.g., biopharma research and development, crypto).
Pictured here is an X July 16th 22 Short Put (20 delta), paying .74/contract as of Friday close, 3.48% ROC at max/27.6% annualized. As you can see, that play is somewhat close to price action of late, so I'd only put that play on if you're comfortable with potentially taking assignment at 22 and then wheeling it from there. Alternatively, opt for a setup that is consistent with any directional assumption you have as to where U.S. Steel goes from here and that takes advantage of the high implied here.