Opening (IRA): XBI November 19th 110 Short Put... for a 1.71 credit.
Comments: 30-day implied isn't great here at 34% or so, so this is more about taking advantage of weakness than anything else.
XBI
XBI will complete upwards 26 period than go up 1 or 2 cyclesXBI (Small Cap Biotech Index) is due for 2 or 3 upwards movements (includes current wave). XBI moves in cycles of 2 or 3 (or 4 when it became overextended) and in between we have a 1, 1 pattern (it takes a break) where it goes up 1 sideways / 1 down, or 1 up / 1 down.
I predict it will complete the upwards 26 period and then go upwards for 1 or 2 more 26 candle periods (daily timeframe).
The pattern doesn't say if it is going to move for 2 or 3 but it shows that it can be one or the other.
In addition, I factor the current bullish signs for XBI which helps to support this theory.
Note: The stock GH is included but hidden in order to allow me to show the higher pattern. It just a way to scale up the chart.
AXNX: Calls on IncontinencePromising biotech setup here, had a nice break of 70 recently and may be looking to go higher. Potentially risky if XBI rolls over but strong momentum here nonetheless. Good luck traders!
Should be scanning ETFsCome Monday going to look at a position in XBI (if it has not gone too far). Pulled back and spiked at the Weekly 50% Retracement that matches with prior price action. Stop needs to be just below the low of May 11th.
The industry for this ETF is Biotech. This should make Cathie Wood happy.
The Week Ahead: ARKK, ARKG, GDXJ, MJ, XBI, XLE, X, CLF, SAVE, FHere's where the premium was at as of Friday's close:
Broad Market Exchange-Traded Funds With 30-Day Implied >20%:
IWM (1/23)
Comments: I have quite a bit of IWM on here, but my order of preference is broad market, then sector, then single name, so am comfortable with adding if we get both weakness and a pop in volatility. IWM/RUT has been fairly rangebound, so it's worthwhile to pop open a chart and see where the bottom of the range is and where any puts you sell are relative to the range between 210 and 235.
Sector Exchange-Traded Funds With 30-Day Implied > 35%:
ARKK (31/45)
ARKG (18/41)
GDXJ (0/40)
MJ (7/40)
XBI (12/38)
XLE (2/36)
Comments: I've got ARKK, ARKG, and MJ July monthlies on, so I may look to add some GDXJ, even though its implied volatility is literally at the bottom of the 52-week range (which is still afflicted by the 2020 pandemic range, so implied volatility rank/percentile aren't all that helpful here), and it isn't exactly weak relative to where it's been. MJ and XBI are currently the most weak out of the group, so I'm personally leaning toward putting on some more XBI, having taken have a June trade last week.
Single Name With 30-Day >50% That Do Not Have Earnings Before Contract Expiry:
X (Steel) (9/74)
CLF (Basic Materials) (18/73)
SAVE (Airlines) (2/55)
F (Autos) (19/55)
OXY (Oil and Gas) (8/53)
SABR (Airlines; Technology) (25/51)
MRO (Oil and Gas) (0/50)
Comments: Given the slim pickings in the broad market and exchange-traded funds space, I've made a list of options highly liquid single name to potentially play while I wait for broad market or sector volatility to return. This list isn't exhaustive, and I've culled out a ton of meme names that have juicy implied volatility but are more likely to become a headache because they're (ironically) too volatile or they're in a space where they're more likely to blow up in my face (e.g., biopharma research and development, crypto).
Pictured here is an X July 16th 22 Short Put (20 delta), paying .74/contract as of Friday close, 3.48% ROC at max/27.6% annualized. As you can see, that play is somewhat close to price action of late, so I'd only put that play on if you're comfortable with potentially taking assignment at 22 and then wheeling it from there. Alternatively, opt for a setup that is consistent with any directional assumption you have as to where U.S. Steel goes from here and that takes advantage of the high implied here.
Closing (IRA): XBI June 18th 115 Short Put... for a .37/contract debit.
Comments: In for 1.50/contract (See Post Below), out for .37/contract here; 1.13 ($113) profit per contract with 21 days to go. It's still somewhat weak here, but implied volatility has crushed into sub-35, which is kind of my exchange-traded fund implied volatility cut-off.
Opening (IRA): XBI June 18th 115 Short Put... for a 1.50/contract credit.
Notes: Weakness and a 30-day implied at 36.63%. 1.32% ROC as a function of notional risk.
Closing (IRA): XBI May 21st 120 Short Put... for a .20/contract debit with 21 days to go.
Notes: Some more pre-vacation profit-taking/clean up. In for 2.17/contract (See Post Below); out for .20 here. 1.97/$197 profit per contract.
Opening (IRA): XBI May 21st 120 Short Put... for a 2.17/contract credit.
Notes: 30-day at >35% at 40.1%. Selling the 16 delta here. 1.84% ROC at max as a function of notional risk. As usual, will take profit on approaching worthless or, if in the money at expiry, take assignment and sell call against.
OPENING (IRA): XBI MARCH 19TH 135 SHORT PUT... for a 2.11/contract credit.
Notes: With 30-day at 37.5% and expiry-specific at 38.3%, selling a 16 delta in the March cycle (52 days). 1.59% ROC at max as a function of notional risk.
XBI Channel Trend AnalysisJust for fun Biotech trending with channels relative to XBI. Should normally continue Current 1Yr Channel (white) and entering Channel 'B' after been solidly rejected at top of it.
$VRTX Vertex Short Idea (Bearish head and shoulders)Buy put spreads for April on this name. I think 180/165 put debit 4/19 would do well. XBI is under a lot of pressure, this company has nothing fresh right now, massive head and shoulders.
Get it back in that safe channel
OPENING (IRA): XBI FEBRUARY 19TH 125 SHORT PUT... for a 2.07 credit.
Notes: With 30-day at 39.2% and expiry-specific at 38.7%, selling a little bit of premium in biotech. Will run to approaching worthless/take assignment, sell call against if assigned. 1.68% ROC as a function of notional risk.
$IWM RTY would be in trouble below 2100$IWM RTY would be in trouble below 2100
This week is a good week to play short if the momentum on the small cap index sells to the downside.
long set upmassive support at 12. looks like a great r/r swing trade or hold for a potential break out over 30 $XBI
Lineage therapeutics Weekly chartBroke out of the downtrend, created a base, now potentially ready to break out $XBI.
ONEM: Potential Runner Forming A Cup and HandleInteresting setup here in ONEM. Creating the handle here with a nice risk reward skew. Could be worth a look
Long set upThis bio showing strong base of support. looking for 2.80 then possible bigger move to 4 $XBI
BBIO: Innovative company and the future of health care?A company with an innovative approach to health care with an equally nice chart pattern. Check out what they have to offer on their company website (can't supply links yet)
