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POT

POT - Pressure Cooker (..tnx Shane ;-) )This concept - not setup - stems from Shane Blankenship, my former mentor of MG. I use this analogy in many situations, where the market just pressing price, up or down. What's important here is, the release of the pressure. See that one wide range bar? This is "interesting", something important is going on here. Now, since every breakout trader is long, they (Market Maker for this one Stock) will most often try to scare them out by letting price fall back like cooled steam falling back from air to ground. Taking this analogy as a "CONCEPT" and not as a "setup", gives you the freedom to reapply it in many other situations and trades. (Thank you Shane, your the real Master...) P! ...and allways keep in mind - never ever ever risk big, because everything we think can fail.
PLong
by Tr8dingN3rd
12
PREMIUM SELLING CANDIDATES FOR TUESDAY -- CY, HOG, POTWith broader market volatility bleeding out of the markets, I'm on the hunt for non-index premium-selling plays, and there are a few that have popped up on my radar. That being said, earnings season is nigh, so it might be best to be particularly selective as to individual underlying plays, keeping powder dry for the actual earnings, rather than pulling the trigger here such that you have to guide the setup around the actual earnings announcement. In any event, here are a few to look at: Individual Underlyings CY: implied volatility rank 100, implied volatility 78. The unfortunate thing about Cypress Semiconductor from a premium selling standpoint is its price, which limits the profitability of iron condor/short strangle setups. Where this is the case, the go-to is a short straddle. Preliminarily (looking at off hours quotes here), an August 19th 10 short straddle will bring in $228 in credit with break evens at 7.72 and 12.28, which would fit in nicely with CY price action. However, if you're looking to take the straddle off at 25% max profit (the usual goal for straddles), you're not looking at a tremendously great play here, even though these little "grounders" add up over time ... . HOG: implied volatility rank 100, implied volatility 63. Preliminarily, an August 19th 42.5/65 short strangle would bring in $168/contract, the drawback being that the underlying only offers monthly expirations ... . POT: implied volatility rank 70, implied volatility 51. Like CY, you won't be able to get much out of a play if you go short strangle or iron condor, leaving you with a short straddle as the go-to setup. The August 19th 17 short strangle will bring in $227/contract credit with break evens of 14.73 on the lowside, 19.27 on the topside which is not a bad fit for what POT is doing on its chart (essentially, sideways chop between 15 and 20). Exchange-Traded Funds The ETF space is not looking particularly attractive here, with the vast majority of them sub-50 in implied volatility rank. The one standout is SLV (coming in at 70), but you won't be able to get much premium out of an SLV play due to fairly low implied volatility (currently 34, which is fairly high for SLV), although it looks enticing for some kind of directional play (bearish assumption).
C
by NaughtyPines