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Weekly GEX Insights: 01/13 SPX dropTotal Correction? What Can an Options Trader Do in This Situation? How Far Might We Fall This Week? We’ll tackle these questions in this week’s options newsletter! It looks like the new president hasn’t even been sworn in yet, but the market is already reacting with fear to every statement he makes. Last week’s economic data didn’t help ease those concerns either. SPX Weekly Analysis Friday’s red candle set a bearish tone heading into this week. Everyone is predicting and pricing in a potential market apocalypse, and I keep getting the same question: “Greg, how far can we fall?” My answer remains the same: we can fall indefinitely—nobody can know for certain ahead of time. What we can do, however, is analyze our charts and use the our weekly GEX profile to identify the key levels, so we can better understand the market’s dynamics. Examining expirations through Friday, every NETGEX profile is negative , so we can expect volatile movements this week. We’re currently trading below the HVL level, which means that market makers are likely to move in tandem with retail traders. This typically results in bigger swings. We already saw this heightened volatility last week—just look at the size of the candles, and you can tell how quickly sentiment can shift. Below 5965 (the HVL level), we are in a high volatility zone what lies underneath? 1st Support Range: 5780–5800 5800: Currently the strongest PUT support level on the downside. A correction may pause here due to profit-taking. Right beneath this level is the previous gap-fill zone. Remember, these areas function as ranges rather than single lines, as I’ve highlighted down to 5780. This could easily be a take-profit target for traders playing gap fills—an approach that’s quite popular. 2nd Support Range: 5700–5650 (Very Strong) Starting at 5700: We encounter another robust PUT support zone. This area is reinforced by previous lows, previous highs, and the 4/8 grid boundary from our indicator. Even if nowhere else, many expect at least a local rebound to occur within these levels. Putting it all together, it’s clear that the weekly trading range is shaping up to be roughly between 5680 and 5965, expecting big & volatile moves. Remember, CPI and PPI data are coming out on Tuesday and Wednesday, which could trigger additional volatility. When looking at SPX, SPY, or /ES futures, my opinion is that the rapidly spiking implied volatility (IV) during a market drop, along with a PUT pricing skew, can present favorable opportunities for options traders. The distance to the strongest lower support zone is around 100–150 points, so you could: Trade directionally for the short term—hoping to be either right or wrong quickly, or Try to profit from the market situation in a more strategic way (which is what I typically do). Personally, I prefer the second approach: I’ll open short-term (a few days) credit put ratio spreads for a small credit, which gives me a wide breakeven range and a big “tent” on the downside.
SP:SPX
by TanukiTrade
Opening (IRA): IBIT February 28th 49.5 Covered Call... for a 47.52 debit. Comments: High IV/IVR. Back into IBIT on a little bit of weakness here, selling the -75 delta call against shares to emulate the delta metrics of a 25 delta short put, but with the built-in defense of the short call. The March monthly is still a bit long in duration for my tastes, so going with a weekly. Metrics: Buying Power Effect/Break Even: 47.52/share Max Profit: 1.98 ROC at Max: 4.17% 50% Max: .99 ROC at 50% Max: 2.09% Will generally look to take profit at 50% max, roll out short call on take profit test, add at intervals, assuming I can get in at break evens better than what I currently have on.
NASDAQ:IBITLong
by NaughtyPines
Opening (IRA): EWY July 18th 35C/February 21st -55C PMCC*... for an 18.17 debit. Comments: Back into EWY, after missing out on the dividend due to my shares being called away. Since there is no longer a dividend to be had, going with a Poor Man's Covered Call/long call diagonal, buying the longer-dated 90 delta strike and selling a shorter-dated call that pays for all of the extrinsic in the long, resulting in a setup that has a break even slightly below where the underlying is currently trading. Metrics: Buying Power Effect: 18.17 Break Even: 53.17 Max Profit: 1.83 ROC at Max: 10.07% 50% Max: .92 ROC at 50% Max: 5.04% Delta/Theta: 46.50/.751 Will look to money/take/run at 50% max.
AMEX:EWYLong
by NaughtyPines
Opening (IRA): TLT March 21st 81 Covered Call... for a 79.98 debit. Comments: Adding a "rung" in March at a break even better than what I currently have on, selling the -75 delta call against shares to emulate the delta metrics of a 25 delta short put, but with the built-in defense of the short call. Metrics: Buying Power Effect/Break Even: 79.98/share Max Profit (Excluding Dividends): 1.02 ROC at Max (Excluding Dividends): 1.28% Generally looking to roll out-of-the-money short call down and out for a credit that is greater than the amount of strike destruction at expiry to generate a quasi-free cash flow setup consisting of (a) short call premium; and (b) dividends. This differs somewhat than what I would ordinarily do, which is generally money/take/run at 50% max.
NASDAQ:TLTLong
by NaughtyPines
4
Opening (IRA): URTY January 17th 51 Covered Call.. for a 49.25 debit. Comments: With my usual leveraged go-to TQQQ in kind of the IV doldrums (IVR 18.1/IV 49.6), opting for a play in URTY with its 63.4% 30-Day IV instead. It's not as liquid and doesn't have nearly as robust an options chain as TQQQ, but I will make do. Metrics: Buying Power Effect/Break Even: 49.25/share Max Profit: 1.75 ROC at Max: 3.55% 50% Max: .88 ROC at 50% Max: 1.78% Will generally look to take profit at 50% max, roll out short call on test of take profit price, and add should I be able to get in at strikes/break evens better than what I currently have on.
AMEX:URTYLong
by NaughtyPines
Opening (IRA): MSTR 2x225/2x240/460/490 Iron Condor... for a 7.00 credit. Comments: IV remains high here at 112.4%. Going "double double" (put spread half the width of the call spread, but 2 x the number of contracts) to accommodate skew. Earnings are on 2/4, so will probably want to get out before then. Metrics: Max Profit: 7.00 Buying Power Effect: 23.00 ROC at Max: 30.43% 50% Max: 3.50 ROC at 50% Max: 15.22% Will generally look to take profit at 50% max, roll in untested side on side test to about half the delta of the tested side. Given earnings on the horizon, will naturally just money/take/run for less if presented with the opportunity.
NASDAQ:MSTR
by NaughtyPines
Opening (IRA): URTY February 21st 41 Covered Call... for a 39.07 debit. Comments: Adding in at strikes better than what I currently have on, selling the -75 delta against shares to emulate the delta metrics of a 25 delta short put, but with built-in short call defense. I would prefer using TNA, since it's more liquid and has more expiries available, but already have a position on in TNA where the short call strike is at or above the -75, so don't want to add here. Metrics: Buying Power Effect/Break Even: 39.07/share Max Profit: 1.93 ROC at Max: 4.94% 50% Max: .97 ROC at 50% Max: 2.47% Will generally look to take profit at 50% max, roll out the short call if the setup doesn't hit my take profit.
AMEX:URTYLong
by NaughtyPines
Opening (IRA): IBIT February 21st 47 Covered Call... for a 44.52 debit. Comments: Adding to my position at strikes/break evens better than what I currently have on, selling the -75 delta strike against shares to emulate the delta metrics of a 25 delta short put, but with the built-in defense of the short call. Metrics: Break Even/Buying Power Effect: 44.52/share Max Profit: 2.48 ROC at Max: 5.57% 50% Max: 1.24 ROC at 50% Max: 2.79% Will generally look to take profit at 50% max, roll out short call on take profit point test.
NASDAQ:IBITLong
by NaughtyPines
4
Opening (IRA): TNA Feb 21st 36 Covered Call... for a 34.33 debit. Comments: Starter position on weakness/high IV in lieu of the less liquid URTY. Selling the -75 delta call against shares to emulate the delta metrics of a 25 delta short put, but with the built-in defense of the short call. Metrics: Buying Power Effect/Break Even: 34.33/share Max Profit: 1.67 ROC at Max: 4.86% 50% Max: .84 ROC at 50% Max: 2.43% Will generally look to take profit at 50% max, add at intervals should I be able to get in at break evens better than what I currently have on.
AMEX:TNALong
by NaughtyPines
Opening (IRA): IBIT February 21st 50 Covered Call... for a 47.07 debit. Comments: High IVR/IV (88.4/68.6) + weakness post-FOMC. Going out to February, as there are only 30 DTE left in January, selling the -75 delta call against shares to emulate the delta metrics of a 25 delta short put, but with the built-in defense of the short call. Looking at this as a "starter" position, so will look to add at intervals, assuming I can get in at strikes/break evens better than what I currently have on. Metrics: Buying Power Effect/Break Even: 47.07/share Max Profit: 2.93 ROC at Max: 6.22% 50% Max: 1.47 ROC at 50% Max: 3.11% Will generally look to take profit at 50% max, roll out short call on take profit point test.
NASDAQ:IBITLong
by NaughtyPines
2
GOLD: Buy or Sell ?Dear friends, Ben here! Gold begins the new week with a slight decline, retreating from the one-month high reached on Friday. Hawkish expectations from the Fed, rising U.S. Treasury yields, and a stronger USD are weighing on the precious metal in the short term. On the other hand, risk-off sentiment might provide support for the safe-haven pair XAU/USD and help limit further losses. :) From a technical perspective, gold confirmed a bullish breakout from a month-long symmetrical triangle pattern on January 8, further reinforcing the ongoing bullish momentum. It is likely that the struggle will continue, and the price may retest the previously broken boundary or the liquidity zone at 2675–2665, which will determine the next phase of developments. Resistance level: 2698 Support levels: 2685, 2665 The situation remains volatile, as numerous factors are exerting pressure on the price. Accordingly: If, after the retest, buyers manage to hold the price above the 2680–2685 support zone, the upward momentum could continue in the medium term. However, if the bullish support structure breaks and sellers push the price below 2680, this could trigger a correction down to 2665 or 2650 before the uptrend resumes.
OANDA:XAUUSDLong
by Bentradegold
2
EURJPY → Consolidating before dropping to 157.00OANDA:EURJPY is under pressure. This currency pair has broken its local uptrend. In the context of weak fundamental and technical foundations, overall market pressure may be experienced. On the global timeframe, the pair lacks a clear trend and has been trading mainly within the range of 166 - 156. A closer look reveals that the recent growth attempt failed near the intermediate high. As the price approached a local resistance level, it reversed and stabilized below the EMA, moving toward the lower boundary of the flat range. Locally, a structural shift has confirmed the bearish nature of the market. However, before further declines, the price may form a corrective move. Using Fibonacci levels to measure this potential correction, the short-term levels to watch are 0.618 (161.75) and 0.5 (162.28). In the medium term, however, the decline may continue. Rate, share your opinion and questions, let's discuss what's going on with OANDA:EURJPY :) Regards R. Linda!
Short
by Bentradegold
Opening (IRA): ARKK Feb 21st 45/50/61/66 Iron Condor... for a 1.43 credit. Comments: An additive delta adjustment trade. With the short call of the setup I put on Friday (See Post Below) at -20 delta and the short put at 29, layering in an iron condor with the short call at the -28 delta and the short put at the 20 delta to flatten out net delta of the entire position. This is skewed slightly short to offset the slightly long delta skew of the setup I put on Friday, so am indicating that it's "short." Metrics: Max Profit: 1.43 Buying Power Effect: 3.57 ROC at Max: 40.06% 50% Max: .72 ROC at 50% Max: 20.03% Since you can't close out an eight-legged setup, will either look to take off each iron condor individually at 50% max or mix and match profitable call side with profitable put side to reduce units/risk running into expiry.
CBOE:ARKKShort
by NaughtyPines
Bull & Bear into the New Year | Week 1 2025 $SPY OptionsAMEX:SPY Last week, our $585 PUT 1/13 was a killer, producing two daytrades that ran for 50% and 132%! Here is what we are watching for this week: We have reclaimed bullish trend and expect consolidation within this range from $584.59 to $607.45. Last two weeks have been low volume and profit taking. We are using this bullish trendline for confirmation using 15-30 minute candle closes. $601 Call 1/24 Entry: Retest and hold of bullish trendline Targets 🎯: $599, $601, $603, $608 $590 Put 1/24 Entry: Breakdown and failed retest of trendline Targets 🎯: $590, $584.59
AMEX:SPY
by PennyBois