Put
Options Idea: Sell The PAM Sep. 18, 2020 10.0 Put @ $0.40Pampa Energia (PAM) is reversing a long-term downtrend, and beginning to trend upwards. After hitting a low of $8.72 in March, we’ve been seeing higher highs and lower lows for the last 4 months. This is an Argentine stock and it’ll probably see a bump higher after the government finishes its sovereign debt restructuring. Also, PAM has a share buy-back program in place and management has been very aggressive about buying back their ADRs when they get close to the $10 zone, which is the strike we've chosen for our naked put.
Warning : PAM options are not liquid. So if you decide to enter into this trade, you’ll probably have to take all the way to Sep 18. Since there isn’t much liquidity, so probably won't be for everyone, but we think the current set-up offers a good risk/reward ratio.
20-PAM-02
Opening Date: July 27, 2020
Expiration Date: September 18, 2020
DTE: 53
IV: 76.42%
IV Percentile: 42%
Odds of Winning: 77.87%%
Odds of Losing: 22.13%%
Win: > 9.60 @ Expiration
Loss: < 9.60 @ Expiration
Reg-T Margin: $290
Chart Legend
Green Area: 100% Win Zone. If we finish above or in the green area, we keep 100% of our initial credit. The size of the green area is the size of credit (our maximum win).
Yellow Area: Danger Zone: We still win, but we have to give back some of the initial credit taken in.
Red Area: If we finish in this area we have a loss. The size of the red area is the size of our maximum loss.
1 standard deviation, 2 standard deviation, 3 standard deviation projections from Opening Date to Expiration Date are included.
Death Cross Forming $UNI will be testing out the Death Cross pattern with $UN paper trading. History shows that UN usually will go down the day after - 2 days after the pattern is complete, reaches it's low a few days later. The goal is to reach $53, right where it was before it blew up last month from earnings
AMD has gone parabolic, good shorting opportunityShort idea is summarized as follows
1. stock has gone parabolic and these typically have aggressive corrections
2. robintrack shows sentiment is extremely optimistic so would like to make a contrarian bet
3. assuming a SZ 84-88 so taking a $4 risk and executing the trade via November PUTS. 80 strike
Options Idea: Sell The September 18, 2020 Put @ $1.3ALRM seems to have stopped its downward trend. It has recovered the EMA 8 and is heading back to EMA 20 territory. I sold a Sep 18 2020 55.0 Put @ 1.3 with the idea that the uptrend will continue over the next few days or weeks.
20-ALRM-01
Opening Date: August 20, 2020
Expiration Date: September 18, 2020
DTE: 29
IV: 44%
IV Percentile: 37%
Odds of Winning: 68%
Win: > 53.70 @ Expiration
Loss: < 53.70 @ Expiration
Chart Legend
The green area represents 100% win zone.
The yellow area is a win, but we have to give back some of the initial credit taken in.
The red area is loss.
1 SD, 2 SD, 3 SD projections from Opening Date to Expiration Date are included.
Trade Log NIFTY August 14In my August 13 post, I had said
“I have a bearish view for tomorrow. I consider the 1 hr candle (11.00 AM) which failed the opening gap and for the day, there was no attempt to recover above 11320. This view is invalid when NIFTY stays above 11360.”
I had also mentioned the possibility of big red candle in my post dated
“One very interesting observation is, both days and weeks so far have formed dragonfly candles -> open = close (within some points). These candles back to back may be seen as a sign of coming climax+exhaustion. So in the next one or two days, NIFTY may show a large red body candle.”
My Trades
On break of opening range, I bought 11300 PUT , which was squared off near the end of the day. Today I bought put instead of selling, because when range fails, breakout is sharper.
My Observations for the day
NIFTY closed 1.08% lower.
BANK NIFTY closed 2.33% lower.
VIX is up 5.37%
Advance Decline ratio is 12 to 37.
Open interest data for Options shows the 11000 and 11300 range.
Finally after 4 days of tight consolidation, NIFTY broke down below and achieved all the targets. Now further downside possible when NIFTY breaks below 11100. I’ll cover more about the same in my weekend post.
Happy Independence Day!!!
Trade Log NIFTY August 12I expressed my thoughts in August 11 post
If global cues are supportive , then NIFTY may attempt another go towards 11380-11390 zone. I think this level should pose some resistance. With VIX slowing down, intraday range is compressing. I do not have a clear view for tomorrow.
One very interesting observation is, both days and the week so far has formed dragonfly candles -> open = close (within some points). These candles back to back may be seen as a sign of coming climax+exhaustion. So in the next one or two days, NIFTY may show a large red body candle.
NIFTY opened a gap down but did not follow through.
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My Trades
I sold 11300 PUT when the signal occurred for intraday buy. This was covered later.
My observations for the day
NIFTY closed flat -0.12%
BANK NIFTY closed 0.17% up
VIX dropped further 2.41%, so far VIX has dropped 6%+
Advance Decline ratio is 23 to 27
Option data confirming the narrow range of 11200 - 11400.
My view
Unchanged view. I still feel the climax move is pending on NIFTY. Possible reversal trade is 11380-11400. But for shorting it is best to wait for price action to confirm the same.
August 11 Trade Log
Weekly View
*Possibility 1 as per my assumption.
3 price outlooks for NikolaI don't see any big investors rallying in before they see alot more than what Nikola has delivered so far.
They're 2Q revenue of 30k came from excecutive member buying solar panels from Nikola :D...
Cathy Wood publicly stated Nikola is headed to 0 in their view.
My bets are on 1 and 2...
Cheers!
Trade Log NIFTY July 30In my trade log of July 29, I commented
The breakout has failed. I think NIFTY is likely to test other extremes -- retest of 11000 and 10900 initially.
This may not happen tomorrow as tomorrow is an expiry day. There may be another attempt towards 11270 which needs to be watched carefully.
Tomorrow I am more biased towards consolidation day.
Review
NIFTY is well on its touch of 10950-11000 range.
The attempt towards 11270, which I was monitoring failed. This prompted me to take trade early.
It looked a lot worse than consolidation day. NIFTY broke down marginally the range of 11110-11300.
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My Trades
The first hour trade was bullish as the opening range broke. But when there was no momentum towards 11300. I exited that at the target.
I was watching the triangular pattern that was getting formed, when it broke down, I bought 11200 PUT. I rarely buy PUTs. I bought PUTS for the next expiry to avoid time decay. And another reason to capture the entire move as I the support below was around 11150, 125 points below.
My observations for the day
NIFTY closed 11102, down -0.90%.
BANK NIFTY down -1.95%
VIX gained 2.55%
Advance Decline ratio is 13 to 37. Broader market showing 1:2 advance decline
Option data for new series showing range of 11000-11200.
FII and DII data neutral.
NIFTY created an important pattern today, which is the intermediate term topping pattern. If this pattern holds, NIFTY won't be crossing 11140 tomorrow. And breakdown towards 11040 and then 11960 looks very likely. Option data also shows not much resistance expected till 11000.
My view
Tomorrow, I assume a downward bias with the possibility of 11040 and 11000. I’ll see the price action around this area to decide the next steps. If this is really some sort of intermediate top, there should be a gap down and the gap will be sustained for the day.
July 29 Post
Trade Log NIFTY July 21My July 20 Trade Log I had said (Link below)
Trend is up. There is no resistance till 10269. I’ll mostly trade intraday on upside.
As I mentioned in my weekly view, I’ll wait patiently till I see some signs of exhaustion. In line with my Monthly view posted in June, NIFTY is close 400 points away from challenging my monthly view. Hence I don't move fast on either sides.
Not much is changed. NIFTY is near the possible resistance zone of 10200-10270.
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My trades today
Intraday, I sold the CALL option when opening low broke. That trade was trapped. That was a signal for selling PUT as well. Both positions squared off near the end of the day.
I am also holding positional short, which is a risky trade.
My observations for today
NIFTY closed 1.27% up. Gap up was sustained.
BANK NIFTY closed 2% up
VIX down 1.15%
Advance decline ratio 32 to 18.
NIFTY is in it’s 6th week of upside. Also it is near the level which has been measured as the target of the move. That is the first swing from March lows to April High.
My view for tomorrow and coming week
1. I’ll be trading with consolidation to bearish bias tomorrow. This view is against the trend but I think 10200-10270 is a good area to start thinking about reversal.
2. I’ll build positional shorts, not aggressively, but with generous time and price stop loss.
3. For tomorrow, if there is a gap up, I think it'll difficult to sustain the gap especially if it is near 10200.
