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EWZ

THE WEEK AHEAD: PEP, COST EARNINGS; EWZ, CRON, NIO, IQ, MJPEP announces earnings on Tuesday before market open; COST, on Thursday, after. Neither presents a particularly compelling earnings announcement-related volatility contraction play, with PEP's rank/30-day implied coming in at 30/18, and COST's at 35/23. With Brazilian elections taking place a week from today (October 7th), it seems to me that an EWZ play is in order if you haven't already got something on: the November 16th 29/39 short strangle is paying 1.59 at the mid with break evens around one standard deevy -- 27.41/40.59. You can naturally go with an October setup, but implied was over 20% higher out in November (44.0% versus 53.2%) as of Friday close, so you're likely to get a little more juice if you go a touch farther out in time. On the exchange-traded fund side of things, EWZ comes in at the top of the board, with a rank/30-day implied at 79/50, followed by USO at 65/28, and GDX at 50/27. Non-earnings high implied: CRON: 71/124; NIO: ~/106; MJ: ~/68.0, and IQ: -/61.4.* Broad Market Majors Background 30-Day: QQQ: 17.2%; IWM: 15.0%; DIA: 13.6%; EFA: 13.3%; SPY: 11.8%. * -- Neither NIO, MJ, nor IQ have been around for 52-weeks, so they don't currently have a 52-week range to evaluate. I would note that the options liquidity for MJ isn't the greatest, but figured I would throw it in there since weed is hot, and not everyone enjoys paying the single name roller coaster. The MJ November 16th 40 short straddle is paying a whopping 7.45 at the mid, with break evens at 32.55 and 47.45 ... .
AMEX:EWZ
by NaughtyPines
THE WEEK AHEAD: NKE EARNINGS; CRON, IQ, NTNX, EWZThis post is going to be short work, since there aren't many earnings in play for next week, and non-earnings premium selling is somewhat limited ... . NKE is the only earnings that comes up on my radar for next week (announces on Tuesday after market close). While it has an implied volatility rank of 72, its 30-day isn't exactly "doing it" at 29%. That being said, the slightly short delta, 68% probability of profit, Oct 19th 80/90 short strangle pays 1.72/contract at the mid. Other top implied volatility underlyings include CRON at 140%, IQ at 60%, and NTNX at 54%, but these underlyings aren't the best in terms of expiry and strike availability, which can make for headaches if you need to roll. I've already experienced some of this in a CRON play; there was no November available after the October monthly, so had to roll all the way out to January, which can be a drag if you're less than the patient type ... . I pretty much knew that it could be a headache going in because of oddball expiry availability, but couldn't pass on the juiciness. On the non-earnings front: "The Brazilian" -- EWZ continues to be frisky (but not quite as frisky as it was) with a rank of 69 and a 30-day of 47%. The November 29/40 short strangle camped out at the 21 delta has a probability of profit of 70%, break evens of 27.35/41.62, and pays 1.65 -- not bad for an extremely liquid $34 underlying.
NYSE:NKE
by NaughtyPines
7
THE WEEK AHEAD: MU EARNINGS; EWZ, GDX, USOAlthough both FDX and ORCL announce earnings tomorrow (Monday) after market close, the underlying with the implied volatility metrics I generally look for in a volatility contraction play are present in MU, which announces Thursday after market close. With a rank of 82 and a 30-day of 60%, the 70% probability of profit 39/52.5 20-delta short strangle is paying 1.66 at the mid-price. Since it's been beaten down a bit recently, I could see skewing that setup a bit to the bullish side, and or capping off call side risk via a Jade Lizard (the October 19th 39/49/50 would do the trick -- it's paying 1.13 at the mid with no upside risk above 37.87). As far as non-earnings are concerned, implied volatility is present where it's been for a bit -- in EWZ (rank 99/implied 55) (the Brazilian exchange-traded fund), PBR (88/72) (Brazilian petro), CRON (76/124) (cannabis), GDX (66/30) (gold miners), and USO (58/27) (oil). Naturally, there's also TSLA (69/54), but with earnings in 52, you might as well wait for the full-on, earnings related volatility expansion/contraction ... .
NASDAQ:MU
by NaughtyPines
4
THE WEEK AHEAD: ORCL, KR EARNINGS: EWZ, TSLA, CRONEarnings: ORCL: Announces Thursday after market. Rank/IV: 74/31. Sept 21st 68% Probability of Profit 20 delta 45/50.5 short strangle: .79 credit. KR: Announces Thursday before market. Rank/IV: 54/37. Sept 21st 72% Probability of Profit 20 delta 30/35 short strangles: .60 credit. Non-Earnings: EWZ: Rank/IV: 97/48 TSLA: Rank/IV: 95/57 GDX: Rank/IV: 68/30 USO: Rank/IV: 62/26 FXE: Rank/IV: 53/8 Others of Note: CRON: Background IV at 138% on volume of 24.1 million shares. Oct 19th 70% Probability of Profit 9/19 short strangle: 1.30 credit. See also (for other cannabis-related underlyings): TLRY: Background IV at 135% on volume of 9.02 million shares. CGC: Background IV at 98.5% on volume of 13.1 million shares.
NYSE:ORCL
by NaughtyPines
THE WEEK AHEAD: AVGO EARNINGS; EWZ, GDX, XLooking at what's left of the trading week post-Labor Day ... . AVGO (announcing earnings on Thursday after market close) is the only fairly liquid underlying that interests me for an earnings-related volatility contraction play (rank 57/30-day 37). The 63% probability of profit Sept 21st 200/205/235/240 iron condor pictured here is preliminarily going for 1.65 with a theta of 5.17 and a net delta of .67 with wide bid/ask showing in the off hours. Unfortunately, those 5-wides aren't available in the October monthly at the moment, so be mindful of the fact that you may experience difficulty or have to adjust on roll out if you have to since there aren't any 205's or 235's in the October yet. EWZ is still in a state of high anxiety with a 52-week rank in the 90's and the 30-day above 40%. The 72% probability of profit October 19th 28/38 short strangle camped out around the 20 delta is still paying over a buck (1.28), which is nice in a sub-$35 underlying. GDX (rank 44/30-day 26): Gold and silver have had the bejesus beaten out of them, so it's no surprise that the implied is relatively high here. Given the beat-down: October 19th 19 short straddle, 1.37 credit, 18.21 delta (bullish assumption). Alternatively, October 19th 19 short put (synthetic covered call), .87 credit, 59.74 delta. Lastly: another underlying that's gotten a smack-down -- X (earnings announced 31 days ago). The October 19th 27/33 neutral assumption short strangle is paying 1.06, but I could also see going plain Jane 30-delta short put (bullish assumption) -- the October 19th 28's paying .83; going 70 delta synthetic covered call -- the October 19th 32's paying 2.94; or going skewed short straddle -- the 40 delta October 19th 32 short straddle's paying 3.67, with the strategy selected matching the strength of your assumption ... .
NASDAQ:AVGO
by NaughtyPines
THE WEEK AHEAD: M EARNINGS, TWTR, X, EWZThe only volatility contraction earnings play I'm looking at for this coming week is in Macy's, which announces earnings on Wednesday before market open, since it has the implied volatility rank and 30-day metrics I'm looking for (76/56). Here are some Macy's preliminary setups, with the short strangles set up around the 20 delta strikes: August 17th 36/44 short strangle, 1.21 credit at the mid, break evens at 34.79/45.21. September 21st 35/46 short strangle, 1.60 credit at the mid, 33.40/47.60 break evens. (The reason why I'd go with this one over the August is that there isn't much time to manage the August setup if it goes awry). September 21st 40 short straddle, 5.42 credit at the mid, 34.58/45.42 break evens Other underlyings with earnings in the rear view/exchange-traded funds: TSLA (rank 61/30-day 66). I am unsure of whether I will touch this underlying any longer given private equity discussions. These can ruin an options trade if they go through, as well as ruin one if they don't. (See, RAD, like, more than once ... ). TWTR. The rank isn't great, but there is still some background implied to mine there (41.7%). The Sept 21st 29/36 short strangle is paying 1.06, which isn't shabby for a 32 clam underlying. X. With a 30-day at 41.4%, the September 21st 27/34's paying .87, the 30 short straddle, 3.06. EWZ. I've been short straddling this high implied exchange-traded fund, but the 30/38's paying .82 in the Sept cycle if you just can't stand the kind of skewing out the short straddle enjoys every other day with this one ... . Other Major Food Groups: TLT: Waiting for 122.50-ish for another bearish assumption setup.
NYSE:M
by NaughtyPines
2
EWZ: Likely bottomed or bottoming here...Brazil is extremely washed out, but it has held a long term support level so far. I think odds are the market turns up from here. I'm long $PBR in particular, since it is showing tremendous relative strength vs the brazilian market, and it has a long way to go to catch up to oil, closing the gigantic spread it now has. The situation with the CEO resigning caused further headwinds in the stock, but it has now stabilized and coiling against overhead supply...over time it will break above it following the earnings report most likely -as long as the fundamental story doesn't change and debt continues to be tackled effectively...-. As for the $EWZ chart, we have hit a monthly low volume support, and also the lowest point of the last time they almost impeach Temer, this was a huge capitulation day for many investors and it is where most stocks bottomed back then. I'd look into finding interesting brazilian companies rather than buying the index directly, but it gives us a good reference point here. Another interesting chart is $EEM, and the Chinese stock market, both of which are also affected by the rally in the dollar that we had so far. Best of luck, Ivan Labrie.
AMEX:EWZLong
by IvanLabrie
6
OPENING: EWZ AUG 17TH 34 SHORT STRADDLE... for a 2.44/contract credit. Metrics: Max Loss/Buying Power Effect: Undefined/6.94 Max Profit: 2.44 Break Evens: 31.56/36.44 Theta: 3.89 Delta: -14.41 Notes: Going where the volatility is at (again) in exchange-traded funds to sell a little August cycle premium while I wait for the September monthly to be more in that 45 days until expiration sweet spot. Recently, I've been taking profit in these short straddles fairly quickly (10% max) and then reselling at-the-money, but doing that here (and probably after this point) admittedly presents a marginal trade (10% max of 2.44 is .24).
AMEX:EWZ
by NaughtyPines
2
OPENING: EWZ AUG 17TH 35 SHORT STRADDLE... for a 2.97/contract credit. Metrics: Max Loss/Buying Power Effect: Undefined/~$670/contract Max Profit: $297/contract Break Evens: 32.03/37.97 Theta: 3.15 Delta: 30.73 (Neutral to Bullish) Notes: Here, I'm looking to emulate the delta of a naked 30 delta short put (paying ~.70/contract currently), but bringing in the beefier credit and extrinsic value of a short straddle. Looking to take this off for the lesser of 10% of buying power effect (~.67) or 25% of max (~.74).
AMEX:EWZLong
by NaughtyPines