OPENING: NKLA AUGUST 21ST 15 SHORT PUT... for a .90 credit.
Metrics:
Max Profit: $90
Max Loss: $1410 (assuming stock goes to zero)
Break Even/Cost Basis in Shares: 14.10/share
ROC% at Max as a Function of Notional Risk: 6.4%
Notes: 30-day implied still high here, so doing something a little more risk adverse with a far out-of-the-money short put that still pays >5% ROC at max as a function of notional risk. Ridiculous that a 2.25 delta strike is paying that amount. The one minor downside: markets aren't the most liquid here; I got filled at .90 when markets were .10 wide. They've splayed out to .30 wide since ... .
Shortput
THE WEEK AHEAD: MU, FDX EARNINGS; XOP, IWM, EWZEARNINGS:
MU (36/64/11.7%) announces earnings on Monday after the close. Pictured here is a 19 delta short strangle in the July expiry, paying 1.55.
FDX (46/59/11.4%) announces Tuesday after the close, with the 20 delta July 17th 115/147 paying 4.56.
EXCHANGE-TRADED FUNDS ORDERED BY RANK AND SCREENED FOR 30-DAY >35%:
EWW (59/44/12.6%)
EWZ (47/63/17.7%)
XLE (45/52/16.0%)
GDXJ (43/60/17.7%)
SMH (37/42/12.0%)
GDX (36/45/14.5%)
XOP (32/70/20.2%)
USO (13/67/16.7%)
Would probably go out to August here (54 days) ... . Looked at through the lens of what the short straddle is paying as a function of share price, it looks like I should be selling premium in XOP (20.2%), followed by EWZ (17.7%) and/or GDXJ (17.7%).
BROAD MARKET ORDERED BY RANK:
IWM (57/45/12.7%)
QQQ (38/32/<10%)
EFA (37/29/<10%)
SPY (37/34/<10%)
Small caps continue to be where the juice is at.
IRA DIVIDEND-GENERATORS
IYR (53/40/11.7%)
XLU (50/33/<10%)
EWZ (47/63/17.7%)
EWA (46/40/11.2%)
EFA (37/29/<10%)
SPY (37/34/<10%)
HYG (35/20/<10%)
EMB (20/18/<10%)
TLT (20/19/<10%)
EWZ offers both better better premium as a function of stock price than IYR at the moment, as well as slightly higher yield (3.66% for the former; 3.50% for the latter). Since I've already laddered out IYR, I may dip at the EWZ well with the 16 delta short put paying .70 in August at the 22 strike, .84 in September at the 21 ... .
OPENING: NKLA JULY 17TH 55 SHORT PUTfor a 21.95 credit.
Notes: High rank/implied after going public (134/328). Cost basis of 33.05 if assigned on the 55's. The July at the money 80 short straddle is paying around 60.00 relative to a share price of 81.33 or about 73.8% of the share price, which doesn't happen very often ... .
OPENING: AMD JULY 17TH 44 SHORT PUT... for a 1.13/contract credit.
Notes: Out of my monied covered call in the IRA for "decent" earlier today; back into it in the margin for a "classic" wheel trade in that ~45 days 'til expiry wheelhouse. Perennially decent implied (currently at 54.5%), good options liquidity, and affordable share price make this underlying ideal for short put/acquire/cover trading.
OPENING: TQQQ JULY 17TH 55 SHORT PUT... for a 2.73/contract credit.
Notes: Background implied isn't what it was a few short weeks ago, but it's still pretty high here at 89.6%. Looking to "wheel" this (i.e., short put, acquire, cover) if it breaks down; otherwise, perfectly happy to keep the premium. 5.22% ROC at max (if cash secured).
OPENING: C JULY 17TH 35 SHORT PUT... for a 1.22/contract credit.
Notes: Taking a small directional shot here in relatively high implied for a financial (42/53) that's been #CoronaHammered. Would also be fine with taking on shares and then proceeding to cover with a cost basis of 33.78, since it has dividends (4.4% yield).
OPENING (IRA): EWZ SEPTEMBER/JUNE 17/19 SHORT PUT LADDER... for a 1.44 credit.
It's not much of a ladder with only two rungs, but there's no July currently (there will be one after May opex, after which I'll consider adding a third rung).
An acquisitional play in high rank/implied (53/66) to potentially grab this divvy yielder (5.15%) at a discount.
OPENING: XLE JUNE 19TH 30 SHORT PUT... for a 1.06 credit/contract.
Notes: With rank/implied at 47/57, going bullish assumption here with the notion that oil prices recover somewhat as COVID-related restrictions lift. My general go-to is short strangle, but didn't want to get whipped on the call side if the recovery is dramatic.
OPENING: TQQQ JUNE 19TH 35 SHORT PUT (LATE POST)With rank/implied at 74/124 and the at-the-money short straddle paying a whopping 33% of the value of the stock price in the June expiry (57 days until expiry), sold the 84% probability of profit strike for a 2.06/contract credit late in the session.
Break even of 32.94.
CLOSING: /CL1! PUTSThis ... will leave a mark.
Simply too much risk to be naked/unhedged here in light of what occurred with the May contract, which may lather, rinse, repeat with the June.
OPENING: /CL APRIL 16TH 14 SHORT PUT... for an $850 credit.
Notes: With implied/rank at 67/181 and WTI crude at multi-year lows, adding in neutral to bullish assumption in April. Scratch at 22.41 for the whole show.
OPENING: CL1! MAY 14TH 15 SHORT PUT... for a $2260 credit.
Notes: Layering on some additional short put on weakness. Will begin to clean up near max loss April spreads here shortly ... . Scratch at 83.91.
OPENING: CL1! MAY 14TH 16 SHORT PUT... for a 1.47 ($1470) credit.
Notes: With my short put spreads all but goners, looking to re-coup some on this massive sell-off, where -- in all likelihood -- the "risk" is to the upside. Scratch at 36.11. I'll slap my Grandma if /CL breaks below 16.00.
Laddering these out in time ... .