optionsstrategies

... 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...

... for a 2.57/contract credit (cost basis of 212.43/share). Notes: Here, I'm looking to acquire additional SPY shares, but only at a potential 25% discount from current price. Otherwise, I want to get paid to wait and/or reduce cost basis in the meantime. Because expiries are skip month (March, June, September, December, etc.), will look to roll out for...

TWTR (41/54) announces earnings on Tuesday before market open; pictured here is a May 17th 30/39 short strangle. Metrics: Max Loss/Buying Power Effect: Undefined/3.50/contract Max Profit: 1.09 Break Evens: 28.91/40.09 Delta/Theta: -3.99/4.92 Front Week to May Opex Volatility Differential: 41.5% Notes: Look to put a play on in the waning hours of the Monday...

... for a 1.10/contract credit. Metrics: Max Loss/Buying Power Effect: Full notional Max Profit: $110/contract Break Even on Setup: 123.90 (18.4% discount over where the underlying is currently trading if assigned) Delta: 10.93 (Current) Theta: 1.36 (Current) Notes: While I'm sitting on my hands a bit here, I figured I post one of my kid's "Not A Penny More"...

Albeit lazily drawn, I present the dreaded “vomiting camel” pattern. I’m not making this shit up. There’s actually a pattern you can look for that is a serious fucking bear when you do. It’s got this ridiculous name for obvious reasons, but here it is and I’ve decided on the 4/46 long put, 17 strike. It cost .66 and is at .69 as of 1053am 4/12. I’m not going to...

EARNINGS: 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...

... for a 1.67/contract credit. Metrics: Max Profit: 1.67 ($167) Max Loss/Buying Power Effect: 3.33 ($333) Break Evens: 83.33/99.67 Delta: -2.03 Theta: 2.02 Notes: Some nondirectional premium selling here in an exchange-traded fund with high implied (24.8%) relative to the broad market; going 25 delta with the shorts, five-wide with the longs and collecting...

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...

MSFT 05-Apr-19 IV30: 21.7, IVR: 50%, ATMIV: 16.2 +0.18D Long 1 Call: 120 Strike @ $0.25 -0.29D Short 1 Call: 119 Strike @ $0.49 -0.11D Credit: $0.24 PCR:22:78 Comments: Looking for a short term drop to 1ATR low from the 21EMA.

A look at the SPX... might chop around for a while here, good for Premium sellers

AAPL 05-Apr-19 IV30: 23.0, IVR: 48% (Moderate) IVMA20: 20.4, ATMIV: 23.5 Naked Put +0.04D Long 1 Put: 170 Strike @ $0.22 +0.04D Debit: $0.22 PCR: 49:51 Bearish news: markets.businessinsider.com

SPY 21-Jun-19 IV30: 13.2, IVR: 56% (Moderate) IVMA20: 11.8, ATMIV: 14.0 Bear Call Spread +0.31D Long 1 Call: 291 Strike @ $3.22 -0.34D Short 1 Call: 290 Strike @ $3.64 -0.03D Credit: $0.42 PCR: 60:40

Although VIX finished the week above the low volatility environment zone (<15) at 16.48, not much is enticing here from a premium selling standpoint at first glance. Earnings announcements are now down to a trickle, with the next quarter's announcements coming into range in the May cycle, militating in favor of putting on earnings-related volatility contraction...

Adding another rung to my TLT put calendar ladder for a 1.08/contract debit. (See Posts Below).

... for a 1.03 credit/contract. Metrics: Max Profit: $103 Max Loss/Buying Power Effect: Undefined/~3.85 Break Evens: 26.97/34.03 Delta: -6.81 Theta: 1.9 Notes: Going directionally neutral short strangle here with 30-day implied more than twice that of the broad market and giving myself a little room to manage intratrade. Will look to take profit at 50% max (.51).

SPY 22-Mar-19 IV30: 10.7, IVR: 37% (Moderate) ATMIV: 9.6, DTE: 4 Bull Put Spread +0.18D Long 1 Put: 279 Strike @ $0.44 -0.24D Short 1 Put: 280 Strike @ $0.61 -0.06D Credit: $0.17 PCR: 78:22

QQQ 17-May-19 IV30: 14.3, IVR: 18% (Subdued) Short Iron Condor +0.24D Long 1 Call: 186 Strike @ $1.37 -0.28D Short 1 Call: 185 Strike @ $1.67 -0.09D Long 1 Put: 159 Strike @ $0.78 +0.10D Short 1 Put: 160 Strike @ $0.85 -0.03D Credit: $0.37 PCR:68:32 Stop Loss: 189 Target: 168

Three earnings announcements interest me this coming week from a volatility contraction standpoint: TLRY (--/79),* announcing on Monday after market close; MU (45/51) -- Wednesday after market close, and CAG (86/45), Thursday, before market open. CAG: Pictured here is a CAG April 18th 22/24/25 Jade Lizard, which was 1.03 at the mid as of Friday close, giving it a...