There isn't much premium out there to be sold in index or sector exchange traded funds, but this is one of them ... .
Metrics:
Probability of Profit: 46%
Max Profit: $518/contract
Max Loss: $415/contract
Break Evens: 55.82/66.18
Notes: I'll shoot to take profit at 25% of max ... .
Rotating into exchange-traded funds here ... . EWZ and XBI appear to have the best implied volatility rank/implied volatility percentage metrics. I already have an EWZ fly on, so XBI it is ... .
Metrics:
Probability of Profit: 44%
Max Profit: 5.29 ($529)/contract
Max Loss: 3.00 ($300)/contract
Break Evens: 56.38/66.96
Notes: I'm going to shoot for a fill...
With the VIX still hovering in sub-15 territory and an examination of broad index exchange-traded funds therefore yielding less premium than I would like,* I'm turning my attention to sector exchange traded funds for possible premium selling plays.
Naturally, VIX levels could change in light of the outcome of the Italian referendum (as of the writing of this, Dec...
I believe a big move is coming. I'm leaning bullish, but if we lose major support around 57.80 this will be a short play. It's important to be conservative. Wait for the break of resistance, or break of support.
Biotech went wild after Donald entered the white house.
It will rage for a while longer. When it hit the 75 mark, enter short with LABD.
Then ride it down to see the gap closing.
There is a risk that it will close the gap before it hits 75 - by e.g. double topping, but I find it more likely that it will now continue up to 75.
75 is the critical number for the short entry.
It seems like Biotech has found its bottom, we should rally from here... There is a strong chance due to the elections that we may get an undercut low next week to get all the retail traders out before the big rally.
Opening LABU position today with SL at today's intra day low.
LABU looks right here for a reversal. The Bullish Bat pattern is in play as we reached the 88.6% pattern today. We now have a chance to go to 50% fibo which is around $40.10
We are finally starting to see some bullish indicators on the daily for XBI. Of course with bio, the swings are long and hard to predict bottoms, so this idea/play is pure speculative. Looking back we can see similar RSI divergence signals and MACD crossovers as to what we can "potentially" see here in the next couple of days.
Any bounce off the 55.95-ish area...
Focus in the short term (which is 25-45 DTE for me) will be on ETF's, although opportunities could crop up with earnings (still hoping for a TWTR dip post-earnings to go long via short puts).
Here's what came up on my high IVR/IV screen:
BANC, IVR's 100/IV 100. Options, however, are crappy (monthlies only), but you can get something decent for a 20 delta short...
Despite the gap up today, the short term downtrend is still in-play. Key support/resistance are converging which suggests a strong move either way. The descending triangle pattern seen here has a heavily has bearish probability. My 2 main trend indicators are EMA (13/48) and PPO (12,26,40), which are both bearish on the daily time frame.
There's nothing I like more than spotting similar patterns when looking at charts. History does tend to repeat itself. So what we can see here is a pretty standard MACD divergence forming right now, and what looks like a copy paste of what happened a few months back. I'm short until the bottom trendline. Weekly chart not looking good either, but we'll look at that...
