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BX - Looking for yield? Covered short straddle on Blackstone!THE DAWN OF ASSET MANAGERS As discussed towards the end of last year, 2018 should be the year of the brokers and asset managers (please watch related ideas below). In this context, and with a dividend yield of 6.36%, BX is probably one of the best asset management pure-plays out there. The trend has been strong on all time frames and the stock is attempting a breakout as we speak. But how to play it in the current top-ish market environment? There is a smarter way than a simple outright buy. LOOK FOR YIELD AND ENHANCE IT WITH OPTIONS 1. Buy the stock in a half size which makes sense to your strategy or portfolio at $34.91 (last close) 2. Sell one-year $40 OTM CALL and pocket $1.39 (indicative) 3. Sell one-year $32 OTM PUT and pocket $2.66 (indicative) COMPELLING RISK AND YIELD ANALYSIS At expiration of the options, in one year, one of the below should happen. 1. The stock is range-bound ($32-40): Stay long the stock and pocket (call premium + put premium + dividend yield) = 3.98% + 7.62% + 6.36% = 17.96% 2. The stock breaks out and trades above $40: Deliver the shares at $40 and pocket (capital gain + dividend yield + call premium + put premium) = 14.58% + 6.36% +3.98% + 7.62% = 32.54% 3. The stock breaks down and trades below $32: Receive the shares and end up with a full position at an average price of $33.45 while you pocket (dividend yield + call premium + put premium) = 6.36% + 3.98% + 7.62% = 17.96% . All the while, you become long one of the best asset managers in the world with an improved dividend yield >10%. THIS STRATEGY CAN BE ROLLED OUT WITH ANY TIME HORIZON (MONTHLY, QUARTERLY, SEMI-ANUALLY). COMMENTS WELCOME.
NYSE:BXLong
by HAL9000
German Yield Curve Flattens as EU Problems Sink inAlthough the fake news would have you believe that the Eurozone is fast on its way to recovery, it is still mired with issues and the failed Euro is taking its toll on German yields. There is still geopolitical tension, a migrant crisis, and a huge stagnation in inflation that extends to the entire developed world. The Kovach Chande is incredibly bearish and we are testing the lower bound of the Kovach Reversals Indicator. Look for a brief pullback from this lower bound before it presses further. Check out the Kovach Indicators here !
TVC:GB10YShort
by quantguy
Dollar Bears BackAs predicted (see linked article), there was a brief respite in the USDJPY's tumble, marked by a morning star pattern, confirmed by a green triangle on the Kovach Reversals Indicator. Currently, we are in a vacuum zone and both Kovach Momentum Indicators are solidly bearish. Yields are lower, and there doesn't seem to be much on the horizon to lift the dollar weakness ahead of Non Farm payrolls next week, or a major breakthrough on the tax plan. If you're interested in the Kovach Momentum Indicators or the Reversals Indicator, check them out here !
Short
by quantguy
FOMC Minutes Reveal Inflation Still a ConcernThe FOMC minutes are being released as I write this, but weak inflation seems to one of their key concerns. Expect the yield curve to continue to flatten as this gets priced into the long end. The spread between the US 30 year and Us 2 year has been careening off a cliff lately and given this news, it is safe to expect this trend to continue. The Kovach Chande indicator is solidly bearish, confirming this, and the lower bound of the Kovach Reversals indicator is continuously being pushed. If you want access to the Kovach Momentum Indicators, Reversals Indicator, or Crypto Specific Indicators, please sign up at quantguy.net!
TVC:US30YShort
by quantguy
Yield Curve Below 1%, Racing to the BottomThe yield curve (spread between the 30 year and 2 year spread) just broke below 1%. All indicators suggest this trend to continue. It has been encroaching the lower Bollinger Band of the Kovach Reversals Indicator, with no retracement in sight. A retracement will be confirmed by a green triangle, if an when it happens. The Federal reserve should be very mindful of this in their December meeting. If you're interested in the Kovach Reversals Indicator and more, sign up for access at quantguy.net!
TVC:US30YShort
by quantguy
US 10-year yield at major crossroadsThe TNX should be watched very closely next week as the daily chart currently indicates a high risk of seeing another bond rally in the wake of the latest US employment figures (which weren't all that bad). If doubts over a possible Fed rate hike towards the end of the year strengthen in September, the 10-year yield could fall back to it's historical lows, reached earlier this summer. This trade setup currently suggests that so long as the TNX trades sub 1.65%, bond prices are likely to rebound in September. The other scenario would consist in prices breaking support, perhaps in the wake of hawkish comments by FOMC participants, leading to a new period of rising rates similar to that which we saw in 2013 and 2015.
TVC:TNX
by ABRAK75