We're back into the thick of earnings season again ... . NFLX (rank 64/implied 52) pops the top on Monday after market close, so you're going to want to slap anything you want to do on before session end to take maximum advantage of a volatility contraction play. Pictured here is a 20 delta iron condor in the weekly with a buying power effect of 6.59 per...
... for a 29.39/debit per one lot. Metrics: Max Loss: 29.39 per contract on setup Max Profit: 1.61 per contract on setup (5.48% ROC) Break Even: 29.39 on setup Delta: 37.54 Theta: 1.40 Notes: Roll the short call out on significant loss of value,* to maintain the desired net delta of the position, and/or to defend the break even. I would note a couple of...
This week: three candidates for directionals and one nondirectional premium selling play ... . CPB: Although timing could have been better to catch the absolute bottom in this, implied volatility rank and background implied volatility remain quite high in this underlying (61/35). Given price weakness coupled with high implied volatility rank, I would think that...
EWZ (Brazil), has been in an uptrend since 2016. The past 3 months has seen it drop to it's support. Oversold conditions in RSI and Williams indicate that EWZ may have bottomed out. This may be a low-risk entry point, but buying would be catching a falling knife. The support has not been well-tested either, so I am remaining neutral on EWZ for now.
With volatility at somewhat of an ebb here, I'm eyeing exchange-traded funds for directional plays in lieu of just hand sitting. The setup pictured here is of a XLU diagonal with the long dated option out in Dec, the front month in August. I would prefer setting this up as a skip month (Aug/Oct), but an Oct expiry isn't available yet. Here are the metrics:...
With various things Brazilian in implosion mode, it's no surprise that PBR and EWZ have high implied volatility here. PBR: Bullish Assumption Setups: The July 20th 30 delta 9 put is paying .43/contract, resulting in an 8.57 break even, which isn't very compelling, but might appeal to some smaller account holders who are willing to hold the short put until near...
It was a promising week that could have easily ended on a bearish note. Buyers are still coming up just short of confirming bullishness. A Promising Stock Rally Comes Up Short of Important Threshold drduru.com $SPY $QQQ $AMZN $AA $CWH $EWZ $NIB $RCL $UBX $ULTA #VIX #T2108 #AT40 #forex $AUDJPY
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... for a 3.22/contract credit ... . Metrics: Probability of Profit: 50% Max Profit: $322/contract Max Loss: $278/contract Theta: 1.71/contract Delta: -7.06/contract Break Evens: 35.78/42.22 Notes: With a background implied of around 31%, it's the highest vol exchange-traded fund out there. As with a short straddle, I'll look to manage the trade early (25%...
HPQ announces tomorrow after market close; COST on Thursday after market. Neither underlying's rank/implied vol metrics are particularly compelling, however, with the former's implied at 29.6%, the latter at 23.5%. Even so, the 68% probability of profit, ~20 delta COST June 15th 188/207.5 short strangle's paying 2.31; managed early (<50% max), that could make...
With the vast majority of options-liquid earnings plays in the rear view mirror, premium selling becomes a search for just plain Jane high implied volatility underlyings. This week, TSLA, RIG, X round out out the top implied volatility single names; EWZ, the exchange-traded fund top implied volatility play. Here are some possible nondirectional setups, which are...
Buying 38.00 P @ 7/20/18 EXP, 2 daily candle closes above broken trendline will be my soft stop.
$brzu $ewz $brzs $spy $spx $ewzs Not too confident in this. The location and size are unusual, but the measurements are right on for being a bullish gartley. You can't make this stuff up.
Buy EWZ on touch of bullish trend line support. Stop at last week's candle minimum, medium-term loose target about 30% above current prices in line with previous uptrend in cycle.
Resistencia en 14,75-15 a superar para continuación alcista
... for a .62/contract credit. Metrics: Probability of Profit: 57% Max Profit: $62/contract Max Loss: $139/contract Break Evens: 40.39/48.61 Variants: May 18th 41/48 short strangle, 1.30/contract at the mid; break evens at 39.70/49.30. May 18th 38/41/48/51 iron condor; .75/contract at the mid; break evens at 40.25/48.75. Notes: With background implied...
It's somewhat a lather, rinse, repeat of last week, given the fact that we're kind of in-between earnings seasons, with the next to kick off here in a couple of weeks. XOP:* With the underlying somewhat in the middle of its range, I'm more inclined to go directionally neutral here, either via short strangle or iron fly. The 27 delta-ish May 18th 33/38 short...
Even though earnings season is winding down to a few names (BB, GME) next week, there's stuff to play in sectors or broad market, with the May expiry (54 days until expiry) coming into view for plays. The XOP May 18th 31/39 short strangle (19 delta) is paying .98 at the mid with the slightly more aggressive 25 delta 32/38 paying 1.38. If you're looking to go...