This is a continuation of a directionally neutral premium selling play (See Post Below) which I've rolled out to June and transformed into a bullish assumption premium selling play. Here, I'm looking to work it as a quasi-synthetic covered call, with the in the money short put standing in for my stock, and the short call acting as cover. Naturally, it isn't...
Although there are quite a few earnings announcements up next week, none of them appear particularly attractive from both a volatility metric standpoint as well as a liquidity standpoint. For instance, MYL (78/46), EA (73/50), and ROKU (65/82) all have the right volatility metrics, but when you go to work setups, you're confronted with non-$1 wide strikes, not...
watching for a break of 60.50 to go short $XLE $XOP $USO $DWT
Pictured here is an INDA (66/29) short strangle in the June cycle set up around the 25 delta strikes. Paying 1.00 at the mid, it has break evens of 32.00/39.00, a buying power effect of 5.65, and delta/theta metrics of .68/1.98. Unfortunately, it doesn't have the tightest markets, so expect a little price discovery should you want to get a fill. On the...
EARNINGS: NFLX and IBM both announce on Tuesday after market close, so look to put on something in the waning hours of Monday's session if you're going to do a volatility contraction play. Pictured here is a NFLX (42/46) 25/10 iron condor,* with the short option strikes at the 25 delta; the longs at the 10 (as of Friday close). Metrics: $825 max profit; $1675...
Consistent growth, profitable, SUPER cheap relative to broad valuations! A rising oil price over the coming years will lead to earnings estimate increases!
... to finish after I was rudely cut off, options returns are a bell curve based on duration, you never want to hold them until expiry unless you are planning on taking delivery! (*Note to tradingview - performance should increase for paid subscriptions)
API data released at 4.30pm EST on Tuesday show a "surprise" build, however, with expected weakness in hard data there should be no surprises. EIA data will either confirm or deny API's release.
Crude has reached and surpassed our expected target of $61.60 for a reversal. Look for weakness into the close of day today.
... for a 1.03 credit/contract. Metrics: Max Profit: $103 Max Loss/Buying Power Effect: Undefined/~3.85 Break Evens: 26.97/34.03 Delta: -6.81 Theta: 1.9 Notes: Going directionally neutral short strangle here with 30-day implied more than twice that of the broad market and giving myself a little room to manage intratrade. Will look to take profit at 50% max (.51).
Trade of the Week (May Cycle): Pictured here is an EWZ (29/34) May 17th 37/45 short strangle: 1.14 credit, .57 at 50% max, break evens at 35.86/46.14, delta -1.46, theta 2.87. Obvious Alternatives: EWZ May 17th 41 short straddle, 3.91 credit, .98 at 25% max, break evens at 37.09/44.91, delta -4.6, theta 4.01. Notes: Pros: High implied, high implied relative to...
Commodities are typically the last asset to peak during a cycle. We typically interest rates peak first, a couple of months later that followed by equities and a couple of months after equities we see commodities peak. Commodities such as crude oil, are part of the contraction phase in the cycle, the higher the price rises it begins to acts as a tax on consumers...
Although VIX finished the week above the low volatility environment zone (<15) at 16.48, not much is enticing here from a premium selling standpoint at first glance. Earnings announcements are now down to a trickle, with the next quarter's announcements coming into range in the May cycle, militating in favor of putting on earnings-related volatility contraction...
XOP has been bullish and grinding higher. Playing consolidation at lower prices via options and DRIP etf.
Three earnings announcements interest me this coming week from a volatility contraction standpoint: TLRY (--/79),* announcing on Monday after market close; MU (45/51) -- Wednesday after market close, and CAG (86/45), Thursday, before market open. CAG: Pictured here is a CAG April 18th 22/24/25 Jade Lizard, which was 1.03 at the mid as of Friday close, giving it a...
looks to be heading towards 62. long term bearish, short term bullish $USO $XLE $XOP