... for a 1.04/contract credit.
With implied volatility fairly low across the board, going small, defined in the exchange-traded fund with the highest background implied volatility on the board (30.9%) to keep powder dry for something sexier to come along ... . Shorts nearest the 25 delta strike, longs nearest the 10 with slightly more than one-third the width...
TWTR (41/54) announces earnings on Tuesday before market open; pictured here is a May 17th 30/39 short strangle.
Max Loss/Buying Power Effect: Undefined/3.50/contract
Max Profit: 1.09
Break Evens: 28.91/40.09
Front Week to May Opex Volatility Differential: 41.5%
Notes: Look to put a play on in the waning hours of the Monday...
NFLX and IBM both announce on Tuesday after market close, so look to put on something in the waning hours of Monday's session if you're going to do a volatility contraction play.
Pictured here is a NFLX (42/46) 25/10 iron condor,* with the short option strikes at the 25 delta; the longs at the 10 (as of Friday close). Metrics: $825 max profit; $1675...
Economic reform isn't going as well as hoped, the Brazilian bubble is popping. Note that their market hit ATH, it looks like a double top due to currency exchange rates.
EWW whipsawed on it's way down last summer, expecting the same here. Short any pops up, watch both iBov and USD/BRL exchange rates.
Trade of the Week (May Cycle):
Pictured here is an EWZ (29/34) May 17th 37/45 short strangle: 1.14 credit, .57 at 50% max, break evens at 35.86/46.14, delta -1.46, theta 2.87.
Obvious Alternatives: EWZ May 17th 41 short straddle, 3.91 credit, .98 at 25% max, break evens at 37.09/44.91, delta -4.6, theta 4.01.
Notes: Pros: High implied, high implied relative to...
Bastante claro el gráfico de este fondo compuesto por acciones de Brasil, el achique que veníamos observando frenó en principio al hacer contacto desde arriba contra la línea tendencial bajista de largo plazo que supo romper a principios de enero..
Ahora, en la medida que el fondo cotizante ya no vuelva debajo de 41 dólares debería continuar su marcha alcista a...
My screeners aren't showing me a ton of things for either earnings-related volatility contraction plays and/or just Plain Jane premium selling, so I'm largely looking just to work what I have on, do any adjustments that are necessary, and wait for a higher volatility environment (VIX is at sub-15 here) to deploy capital back into premium selling.
Last July I put out a video suggesting that Brazil was a great opportunity to allocate capital (linked below). At the time the business cycle had turned from contraction to expansion and from a technical standpoint, we were sitting on support.
Today, +48.6% higher the risk is rising, the cycle is still relatively strong but our technicals are suggesting we...
If the price holds above this level by tomorrow, we are going for another bullish leg.
Espectacular amounts of money have gone into Brazil. Will this continue?
Bradesco might be the best proxy for this.