SNX breaking $3.80 - $3.90 resistence level, make it a support?!The Synthetix Network has been trading sideways ( as have a lot of crypto currencies recently, but that had started to change for the better, and we all hope for a bull run that dwarfs the last one with all this new money now aware of the benefits of DeFi. Battling that is the ever present and constantly adapting scam artist who are coming up with some of the most clever scams I have seen to date. I mean, these are no, hey, just look for a very poor understanding og the English grammer rules, and you got em. These are professionals, and in most cases coders so the ability to produce a clone of a well known and respected, trusted website in the crypto community is just the beginiing, and that is scary enough. Anyway, if anyone wants to discuss that further and maybe a learn a way you can protect yourself, message me. My publication today has shown that has broken out of the lower part of the consolidation channel bottoming out at the support level of $3.50, and topping out at around $4.30 with the resistance residing somewhere in the $3.80 - $3.90 range.....this is the line that SNX was just able to break through, and I think if it can maintain a close above the $4.91 close 3 or 4 days ago then I am hoping we can then turn that $4.80 - $4.90 to a new support as we work our way up in value . I often find channels like this, and the chart will show you where the support ranges are and you can usually hit 7 out of 10 at least just trading off of past support and resistance areas, especially KNOWN areas of support. Someone does not have to be a master to trader to make money or have more Ws than Ls....however, a person does have to have a #bigbag if they want to make a worthwhile profit off of a consolidation channel with what amounts to 80% (@ MAX which you will not see). As always, been trading for bout a year and a half and it is by far the most fun I have had studying something in my life. Psychology and Money, what could go wrong right? Well guys, happy trading and please, basics, basics, basics if you are new. After that go over them again, and do not bite off more than you can chew....these are just SOME OF MY MISTAKES, and they can have devastating consequences, trust me. Good luck guys, and just when you think "Crypto is too hard, or...there is no way our financial system is getting digitized"...I am here to tell you that it is inevitable so the quicker you start getting on board, and trying to learn, the farther you are going to be ahead of that person who, like me, saw BTC trading at $100 6 years ago and laughed at it, and also made fun of it in every way I possibly could.....I know there are people out there still "living under a rock" if you will, and scoffing at what is going on under their very noses because I speak to them everyday. They will be the ones getting taking advantage of when this whole system finally gets all the kinks smoothed out (has to be some). If you guys are on here then that means you are at least either seaking information (GOOD FOR YOU!) or just reading this meaningless jargon, and getting ready to blast me (IN THAT CASE, GOOD FOR YOU AS WELL), it is obvious both of you are active in the financial community, and as long as you stay in the know, you will be a lot better off than the not so proactive dickheads, peace and love guys, and do good business with each other, christ......
Syntheticlong
Bullish Trade of the Week in SOLooking to establish a bullish position in SO either a debit spread or synthetic selling 43p / buying 45 c and buying a 39 put to free up buying power and reduce downside risk
WHAT I'M LOOKING AT NEXT WEEK: MON, EWZ, VIX PRODUCTS, FXEWith VIX at sub-14 levels and without much on the earnings calendar that is ideally playable with options from a premium selling standpoint, next week is likely to be a schnooze in the absence of a broad market volatility pop.
Nevertheless, there are a couple of plays I might consider.
MON: MON announces earnings on April 6th before market open. With an implied volatility rank of 58 and implied volatility of 32, it's not looking all that sexy for premium selling at the moment, with the preferred rank/IV metrics being >70 and >50, respectively. Nevertheless, the run-of-the-mill short strangle is offering up more than 1.00 credit ($100)/contract in premium at the moment, so it might be a worthwhile play (April 15th 81.5/94 short strangle).
EWZ: The Brazil ETF still has a bit of "kick" in it, with implied volatility rank at 72 and implied volatility at 58. For lack of premium selling elsewhere and to offset in part a tested iron fly setup I have on (see Post below), I've dispersed risk by laddering setups in this underlying (short strangles/iron condors) through several expiries, which doesn't tie up much buying power given the price of the underlying.
VIX/VXX: With VIX at these levels, I'm considering loading additional long positions here, although I don't want to go all crazy large at once. My setup of choice has been VXX long-dated diagonals/synthetic longs/poor man's covered calls with the back month long option in the September expiry, which allows me plenty of time to be right without having to leg into and out of, for example, short put verticals repeatedly. This also allows me to "swim with the tide" with the short call, since we're in contango here, which exerts a downward pressure on price (although this also affects the value of the long-dated option in the short term). (See VXX Posts, below).
As a side note, I'm avoiding plays in leveraged products like UVXY and SVXY due to pending SEC regulations that may affect these instruments. Although these regs are mainly focused on 2x and 3x leveraged products, I don't want to be in any leveraged product with a long-term setup whose liquidity and/or viability might be affected by implementation of the regs.
FXE: With the Euro hovering slightly below my sell area (1.14), I'm looking at getting into the Euro proxy FXE with a short play of some kind going forward. However, it may pay to be patient here, since we've have had "dovish gruntings" from the Fed which may put a damper on Greenback strength for a bit of time, as well as some modestly positive ECB data. As compared to spot, I could still potentially pull the trigger on a short FXE setup of some kind here, steering well clear of recent strength areas (e.g., 8/24 "risk off" spike to 114.81 or the Fib line at 116-ish).
TRADE IDEA: VXX SYNTHETIC/POOR MAN'S COVERED CALLSynthetic covered calls using options are a good way to utilize capital efficiently as compared to buying the underlying outright and initiating, for example, a covered call. Were you to buy 100 shares of VXX at $14, it would cost $1400, with the current value of the short call reducing that cost basis by about $160, so it would cost around $1240 to put on, as compared to the $585 or so per contract to initiate this position. Moreover, you'd naturally have to wait until VXX struck $14 to get in at $14/share, so a synthetic gives you the added advantage of your being able to kind of "pick your price" and/or cost basis for the underlying, even though it's just a "synthetic" price.
Here, the September 16th 14 long call stands in for the stock (since it's mostly made up of intrinsic value), against which I sell calls to reduce my cost basis in the long option over time, the goal being to take off the entire setup in profit when the total credits collected for the short call (and any rolls) + the current price of the long option exceeds what I paid for the original setup.
Here are the metrics:
Sep 16th Long Call/April 15th 21 Short Call
Probability of Profit: Unknown
Max Profit: Unknown
Buying Power Effect: $585/contract (debit)
Unfortunately, the probability of profit and the max profit are unknown for this setup from the get go, since exactly how much credit you can collect for the rolling of the 21 short call in the months after setup is unknown and will vary over time. It is also possible that, depending on the price movement in the underlying.
I would also note that VXX, by nature, generally suffers from contango, so its price will naturally decline over time in the absence of backwardation. Consequently, it's entirely possible that price could break 14 at some point going forward. Naturally, that's okay as long as the amount of credit you receive for the rolls of the short call exceeds what you paid for the long call (currently, $745) and, of course, I'm assuming that price in VXX will be somewhat above 14 for the duration of the trade.
BOUGHT TO CLOSE USO JAN 17 7/APRIL 1ST 8.5 SYNTHETIC LONGClosing this synthetic long USO play here for a small profit. My timing was a bit off as to entry (I went long on the break of the 2009 low at 32.70), and we may have seen the short-term end of the up move here.
Will consider reloading another synthetic long now that a new low of some kind has been put in ... .
