U.S. financial stocks have been in pullback mode this week despite the SPX moving higher. Considering that financial stocks had been a big boost to market gains over the last several months, this could be concerning. The XLF is down about 3% - and regional banks KRE down 6% - since the recent top. Let's put this move into context, shall we? As MacroView as...
Neutral trade on KRE to try and take advantage of what I think it would be two sided action between buyers and sellers. With a Implied Volatility Rank of 33, is still decent to sell a Strangle (53/57). We make money as long as the price stays between 58.77 and 51.23 in the next 49 days, so we have a buffer of around 7% up or down. This gives us a probability of...
Entered an Iron Condor in KRE (Regional Bank ETF) on June 26th to try to strangle the price between 50.00 and 56.00 for 71 cents in credit. Break even in the trade is below 49.29 and on the high side above 56.71. Two days after the trade the Fed came out passing all banks that were involved in stress tests giving them a green light to add to dividends and start...
In the last 90 days we had a 14% down move and got rejected at the 200 EMA. We might still have more room to go to the downside, but I am betting that we are still correcting and some buyers may start to come in. With an implied volatility rank of 34 and 50 days to expiration, I sold a Jade lizard to eliminate the risk to the upside and still have room to the...
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...
Yield curve is flattening with each rate hike as the short term floor is hiked higher. Not a stable environment for better loan growth. These are the leaders, do people really expect a hand off back to FANG?
I believe now is the appropriate time to begin hedging for huge Black swan style events. This near vertical run in the KRE banking index is now above the 07 highs. It tried to break above the +8 year long channel but failed. I expect a much lower retest. At the very least, I believe low delta long duration put options on this ETF to be a very cheap trap that...
Slowly scaling into financials. I admit I may be booking myself into the spa for a "face-lift" but the risk reward seems skewed in my favor to take a stab here.