If you have any familiarity with looking at trends across various time frames, you'll know that reversals in trend start with building blocks on lower time frames and develop into full-blown ones onlarger ones. SPX500 has begun to break down on time frames 15 min. and below, with the 8 and 34 EMA's experiencing bearish crossovers on the 5 and 15 min. charts. On...
So long as the 8 EMA is above the 34 EMA on the 1H chart and similarly set up on the 5 min., look for long scalps to the upside on the 5 min. chart in the direction of the 1H trend. As of the writing of this post, however, the 5 min. 8 EMA has crossed the 34, so the setup is no longer favorable for a trade in the direction of the 1H trend. Consequently,...
SNDK announces earnings on 10/21 after market close, and with an IVR of 91 (52 Week ToS), it may be too good to pass up as a premium selling play, assuming that the options are liquid enough. I am looking at the bid/ask spreads right now in off market hours, and they do not appear to be promising, with the spread between the bid and the ask for the strikes I'd...
With YHOO announcing earnings on 10/20 after market close (and with little volatility in the broader market to take advantage of from a premium selling standpoint), I looked at possible plays ... . After fees and commissions are considered, it is unlikely that I will play Yahoo. A typical 70% probability of profit Iron Condor setup with the Oct 23rd expiry...
IBM announces earnings on 10/19 after the market close. The volatility isn't flashy (currently at 59 IVR/ToS 52-Month), but this isn't one of those underlyings that gets very "excited" from a volatility standpoint anyways. I'll look to put on a directionally neutral iron condor or short strangle some time during tomorrow's New York session, with an...
Generally speaking, I like earnings plays that will have juice in them with a defined risk setup (e.g., iron condors). This ordinarily means that some of the lower priced fare on the plate just won't produce enough juice for me to bother with unless I open up the floor to using undefined risk strategies like short strangles, which ties up buying power I like to...
The next big earnings play on the calendar is GOOG, which is no longer Google, but Alphabet, Inc. (the name change will never stick; I will still call it Google). It announces earnings next Thursday, and it's looking mighty juicy at this point. Having run through a couple of iron condor setups (which is the only way I will play this given the price of the...
I previously mentioned some time ago that I had a "sweet spot" price in FXE (the EUR/USD proxy), at which I would consider short call verticals (credit spreads). We're there (at 112.50 or so). Unfortunately, current IVR for FXE is 25, a bit below where I'd want it to be for selling premium. Naturally, I could consider a debit spread here, but I am not...
Frankly, I don't use debit spreads very often, since they require a certain degree of directional certainty which I ordinarily do not have. Additionally, they are not high probability plays in the vast majority of cases. However, I have a certain degree of certainty that volatility will increase from here and, ironically, the volatility in volatility is quite...
At some point in time, I want to initiate a short in /ES (I'm using SPX500 for the chart here, so the levels won't be spot on ... ). Here's what I'm waiting for to initiate a classic fingertrap scalp. First, I want to see a cross of the 8 and 34 EMA's on the hourly. Secondly, and since I'm looking for some kind of decent continuation to the downside, I'd like...
So my first earnings play this season (YUM) didn't go all that hot ... . Naturally, rolling out for duration and credit is part and parcel of the premium selling game, but like any other kid in the candy store, I just want to take my candy and go ... . Perhaps NFLX will be a different story. With earnings to be announced on 10/14 after the market close and with...
Days like the past several we've had here with plummeting volatility aren't that fantastic for selling premium, at least with respect to the broader market ETF's like SPY, IWM, DIA, and QQQ. That being said, it's nice to get on, say "nope" for the day, check the trades you do have on to see if anything needs to be done, and then bop off and do something else,...
If you've ever watched any TastyTrade episodes with the 'Soz and Tony, you'll often hear Tom admonishing Tony to "quit showing him the chart." "Mmmm," you say, "Why does he do that?" Well, it's because when "selling premium" (i.e., short strangles, iron condors, and credit spreads), price is not your signal to enter a trade, the implied volatility (IV)...
With an IVR of 46 (52 Week TOS) compared to GLD's 21, GDXJ presents the better premium selling opportunity in the "gold sector" than GLD, the standard go-to for plays in the precious metal. Currently, a Nov 27th expiry 16/18/26/28 iron condor yields .43 credit/contract, a probability of profit of 73%, break-evens at 17.57 and 26.43, and will cost you...
While I no longer scalp much due to the time commitment scalping generally takes (particularly in instruments most effectively traded during the NY session), I used to scalp a great deal when I was in spot forex. The simplest scalping technique I have come across and used exclusively was the "fingertrap method." Although I am not sure who is the originator of...
With GLD at or near the .50 between the 5/18 high and the 7/24 low and with a fair amount of short-term volatility, a premium play may be afoot. A possible setup: a November 27th 101.5/104.5/117/120 Iron Condor, the stats for which are as follows: 71% POP Max Profit: $60/Contract Buying Power Effect: $240 Break-Evens: 103.90/117.60 Notes: I would note that the...
NFLX announces earnings on 10/14 after the market close, so look to fill any setups on 10/14 prior to New York's closing bell. Ordinarily, I like to work these via Iron Condor or short strangle (buying power permitting). Currently, here are the two setups I'm looking at: An October 23rd 89/92/134/137 Iron Condor POP: 71% Max Profit: $89/contract Buying Power...
My little YUM saga continues and is likely to do so for the next several options cycles, but this is a good lesson on how to manage earnings plays (or any other play for that matter) where a side of your set-up is breached either to mitigate your loss on the setup or turn it into an eventual winner. Of course, this requires a degree of patience, since it...