... for a 4.63/contract debit.
Metrics:
Max Profit on Setup: $137/contract
Max Loss on Setup: $463/contract
Break Even: 50.63
Debit Paid/Spread Width: 77.2%
Notes: Will look to take profit at 20% max; roll short call at 50% decrease in value.
Although there are quite a few earnings coming up next week, only two catch my eye from a premium selling standpoint: Twitter and U.S. Steel.
Twitter announces on Wednesday before market open; has a 30-day implied volatility of 75.19%; and the May 4th 20-delta, 74% probability of profit 27.5/38 short strangle is paying 1.28 at the mid with its defined risk...
... for a 3.02/contract debit.
This is a "properly" set up split month Poor Man's Covered Call where the credit received for the short exceeds the extrinsic in the long and has a neutral to bullish assumption. It's neutral because price can stay right here, and I can reduce cost basis further by rolling the short call out in time and/or it's bullish, because it...
Utilities (XLU) might be a good long idea here. As the markets get choppy, utilities like XLU might hold up well. Price above the 10sma and volume increasing.
... for a 2.05/contract debit (82% of the width of the spread).
Another defined risk, neutral to bullish assumption setup in the April cycle ... .
The natural alternative would be to just sell short puts here (the April 20th 48's are paying .66; 32 delta), but the premium in those just didn't seem that worth it relative to buying power effect.
For example,...
The Utilities sector have been underperforming. With IV Rank of 67.5 and down around 10% since December we are getting at least some premium to sell. I don't want to risk a move upward, so I Sold a Big Lizard (Straddle at 51 and bought the 52 call) to eliminate the risk to the upside. This is a high probability trade above 70% and we make money as long as it...
Utilities have taken a major hit in the risk-on market environment we've seen lately. Last week $XLU completed a perfect 61.8% retracement of recent gains and showed a strong bounce at that key support level. I think we have an excellent buy for a swing trade at this level with a view to hold patiently for 1-3 months and take profit at all time highs.
After the long down move the utilities sector has gone through, it looks like it could be ready to turn around. We might be a little early here but this is what we're seeing that is telling us that it's ready to make a move higher finally:
-When you look at the 4 hour chart you can see that the price is coming out of a squeeze higher to the upside
-When looking...
Earnings season is in full swing, with a bevvy of announcements:
NFLX: announces on Monday after market close, with a rank of 79 and a background of 44.
VZ: Tuesday, before market open -- rank 80/background 25.
PG: Tuesday, before market open -- rank 86/background 17.
GE: Wednesday, before market open -- rank 100/background 39.
CAT: Thursday, before market open...
EARNINGS
The earnings on tap aren't looking very enticing to me, as I generally look at getting in on these where the implied volatility rank is >70% and the background implied volatility is >50%. However, they might be worth watching running into earnings to see if implied ramps up.
KMI (implied volatility rank 79/implied volatility 30) announces earnings on...
The following ETFs are related to the Utilities Sector. The ETFs track different sections of the utilities sector as noted. There are many more ETFs in utilities subsections for the USA and international equities. Included for each ETF are the symbol, the total Assets Under Management (AUM), the Number of Shares in circulation (Shares), the Average daily...
-higher time frame showing healthy pullback in defined uptrend finding support at 53.3x area
-mid time frame shows range bound action after a quick downtrend/ signs of accumulation are seen in range bound equilibrium
-momentum is strengthening upward along with volume pressure
-spring candle/pinbar found on mid time frame finding quick support at 53.3x area shows...
SPX vs Major Sectors. I added IBB to cover Biotech.
Please comment. My understanding at this point is to stay in sectors which have good fundamentals and have been relative laggards. The 3 bottom ones at this point seem to be Financials, Technology and XLU / XLP.
Since utilities is a risk-averse sector, so in a pro-growth environment I may want to go with the...
