... for a 5.10 credit. Notes: Putzing with a "10%-er." It's a 10%-er due to the fact that the credit received is 10% of the width of the spread. Here, I'm receiving 5.10 on a buying power effect of 44.90, which would be 11.36% ROC at max as a function of buying power effect (5.68% at 50% max) or 92.14% annualized at max, 46.07% at 50% max. A comparable SPY...
... for .48/contract. Notes: Selling some more SLV (30-day at 47.7%), as well as collating my "ladder" into a single post. Will add in a December monthly "rung" once that becomes available, assuming the volatility hangs in there. Collected 1.74/contract in total. Here's the way I look at this trade relative to one put on in GLD: Currently, GLD is trading at...
... for a 2.13/contract credit. Notes: My weekly 16 delta, expiry nearest 45 days until expiry short put in the broad market exchange-traded fund having the highest background implied. Here, it's IWM, with a 35.8% 30-day and an expiry-specific 37.7%. Break even: 119.87.
... for a 2.30 credit. Notes: My 45 days 'til expiry weekly 16 delta short put in the broad market exchange-traded fund with the highest 30-day implied. Here, it's QQQ, with 30-day at 34.70% and expiry-specific implied at 35.0%. Break even at 241.70 with return on capital of .952% at max, 7.72% annualized at max.
Pictured here is an SPX short put vertical I recently put on as an alternative to going SPY short put in cash secured environment. (See Post Below). When do one as opposed to the other and how should I manage each? First, let's compare the metrics of the two strategies, both of which are neutral to bullish assumption: they will make money at expiry if SPX/SPY...
EARNINGS: There are four options highly liquid underlyings that pop up on my screener for next week with 30-day implied of >50%: UAL (23/88/22.6%)* (on Wednesday after market close); DAL (13/74/19.1%) (Tuesday before market open); SLV (18/59/16.4%) (Friday, before market open), and WBA (43/54/12.2%) (Thursday, before market open). Pictured here is a...
... for a 3.85 credit. Notes: Did my standard 45 days 'til expiry short put, this time in QQQ. It has the highest 30-day amongst "the majors" (i.e., SPY, DIA, QQQ, IWM) and has expiry-specific implied of 35.8%. I'll take profit on approaching worthless or, if in the money, take assignment and sell call against at the strike nearest my cost basis (in this...
... for a 2.64/contract credit. Notes: A bet that TLT doesn't move much with no upside risk (the credit received exceeds the max risk of the two-wide short call vertical) and a downside break even of 157.36 (the short put strike minus the credit received). Additionally, even if it blows through the long call strike at 172, the credit received exceeds the max...
... for a 5.69 credit total. Notes: Amazingly (or not), I have no gold in my retirement account. Although I feel I'm somewhat late to the game, taking up a position here in an instrument with excellent options liquidity. For smaller accounts, consider SLV, which also has the added benefit of having higher background implied (SLV: 69.4% versus GLD: 26.4%) or one...
... for a 2.17 credit. Notes: Post-split implied remains decent here at 53.5% with expiry specific implied at 55.9%. Break even at 110.33. 1.97% ROC (15.98% annualized) as a function of notional risk; .98% at 50% max (7.99% annualized).
... for a 1.92/contract credit. Notes: Going to keep on grinding on my 16 delta short puts in the IRA while this high volatility environment lasts. This week, going with the small caps, which have the highest 30-day on the board out of the majors and have expiry-specific implied at 38.4%. 128.08 break even.
... for a 1.98 credit. Notes: Another late post due to the number of "Update" posts I did yesterday. Instead of putting on my weekly 16 delta short put in SPY where expiry-specific implied is above 20, went with the more "frisky" IWM with expiry-specific implied at 30.8%. This will probably be the last broad market short put I deploy before the general...
EARNINGS: CCL (28/88/25.9%) and DAL (18/77/22.1%)* announce earnings on Thursday. The DAL November 20th 21 delta, 2 x expected move 26/41 short strangle is paying 2.41 or 7.6% as a function of stock price (1.20 at 50% max; 3.8% as a function of stock price). I've pictured a short put here as the simplest play to get in on a sector that has been hammered by the...
... for a 1.49 credit. Notes: With its current yield of 3.66%, looking to pick up some shares lower or just keep the premium. Background implied at 44.9% with an ROC of 2.50% at max as a function of notional risk, 9.71% annualized.
... ladder for a total of 2.17 in credit. Notes: 30-day implied at 39.47% with expiry-specific implied at 43.4%, 42.9%, and 43.4% for November, December, and January, respectively. Current yield of 6.71%, so am fine with taking on shares and covering or just keeping the premium.
And now, for the current single name list: AAL (American Airlines) AAPL (Apple) ABBV (AbbVie) ACB (Aurora Cannabis) AEO (American Eagle Outfitters) AGNC (AGNC Investment) AMC (AMC Entertainment) AMD (Advanced Micro Devices) AXP (American Express) AZN (AstraZeneca) BA (Boeing) BABA (Alibaba Group Holdings) BAC (Bank of America) BB (Blackberry) BBBY (Bed Bath and...
Liquidity. Liquidity. Liquidity. Whether you're short strangling, iron condoring, laddering out short puts, or doing covered calls, having excellent options liquidity is the cornerstone of any options trade, and the universe of highly liquid options instruments is actually quite small relative to the smorgasbord of underlyings out there. I've posted my list of...
With (a) the Federal Reserve telegraphing "lower for longer," but (b) not much lower, given the practical limitations of cutting rates from here; (c) overhead resistance at ~172.50; and (d) the fact that the Fed interest rates will hike rates (modestly or otherwise) "at some point" going forward, I'm looking to short the 20 year + maturity treasury...