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...
With the VIX dropping hard below 15, some of the juice has poured out of the cup ... . Even so, there remain a few plays in the market. ADBE announces earnings on the 15th (Thursday) after market close. The volatility metrics don't quite meet my criteria for a volatility contraction play (56/32), but the March 23rd 210/323.5 short strangle is paying 3.80 at the...
With the shortened holiday week, I'm not expecting much out of the market in terms of volatility, so don't anticipate on putting on anything unless we get some exogenous event pop in the VIX. However, there are a few that might be worth working possible setups in: KRE (regional banks), with an implied volatility rank of 60 and an implied volatility of 22. GDXJ...
... for a .38/contract credit. With an implied volatility of 31.6, this is one of the higher volatility exchange traded funds. Going small. For a two-wide, this credit is less than compelling; I usually want to see 1/3rd the width of the wings out of these. Thinking of it more as an "engagement trade" than anything else, as I wait for some volatility to...
Consolidation triangle forming, confirm a breakout or reversal with increased volume and by watching price trend for up to a few days, depending on how quickly the reversal or breakout takes place. EWZ is at a point of upper resistance, see previous highs several months ago.
Ewz has broken out of its 40-resistance range. First target is apprx 53.75.
Short EWZ on touch of long term resistance line and apparent continuation of long term bear market. However, if current correction leads to an additional wave up and breakout from the trend, the trade will be stopped and there are high chances of reversal towards long term bull market.
After some negative news about bribery in the government the Brazil's ETF (EWZ) got killed at the open with a 18% down move. With the Implied volatility rank of the stock at the high's of the last 52 weeks(100%) it means that buying options is going to be expensive, in other words we are going to be selling overpriced options. Betting that this is an over...
PT1: 34.50 PT2: 44.50 PT3: 54.80 In @ 16. Add @ 24.10. Sell Zone: 99.10 Long bias on Brazil.
VIX With July VIX options at 51 days until expiry, it's time again for a monthly VIX iron fly: VIX July 21st 10/13/13/16 Iron Fly Metrics: Max Profit: 2.00 at the mid POP: <1% Max Loss/Buying Power Effect: 1.00 Break Evens: 11/15 Notes: This setup involves looking at the /VX futures monthly expiry nearest to 45 days until expiration. That is currently...
... for a .61 credit. With EWZ caving heftily here and implied volatility popping, I'm going back to the Brazilian well narrow and small, since I can foresee this having some volatility in it for a bit, in which case I may want to add to the position. Metrics: POP%: 63% Max Profit: $61/contract Max Loss/Buying Power Effect: $139/contract BE's:...
EARNINGS HPQ, LOW, BBY, and GME are all up for earnings announcements. Out of these, BBY and GME appear to be the best candidates for premium selling, given their implied volatility rank and background implied volatility metrics, although virtually every liquid underlying with an earnings announcement bears watching; implied volatility can pop at the last...
So far uncertain if it is just technical based selling or any fundamental reasons. It is a sell once it breaks 40 weeks MA (which is 200 days MA).
With a six-month implied volatility percentile of 76 and a background implied volatility of 37, throwing a touch of "Brazilian" on here ... . Metrics: Max Profit: $247/contract Max Loss: $253/contract Break Evens: 34.53/39.47 Theta: 1.77 Delta: -.29 Notes: Will look to manage this at 25% max ... .
EWZ and the Emerging Markets ETF EEM have a strong correlation (Since EEM have 7.7% of brazil stocks). The correlation for the last year have been .92, and the last 30 days have drop to .40. Today we got a strong move on EWZ of -3.18% at the time of the trade and -.64% on EEM. By trading one to the upside and the other to the downside I will look to reduce...
With the beginning of the next earnings season two weeks out (at least before we see something decent), I'm looking to put on some basic exchange-traded fund premium selling plays to bide my time until then. Even there, however, the premium selling opportunities aren't fantastic: KRE (Regional Banks): I haven't played this one before, but its background implied...