NaughtyPines

NaughtyPines

As a premium seller, I look to sell premium in high volatility environments or where the volatility in a given underlying (U/L) is high, and I use Dough.com's "Grid" with the drop down menu set to "TastyTrade" to screen for these plays, looking for IVR numbers that exceed 70 for individual stocks and 35 in ETF's, but naturally higher is better ... . However,...

NaughtyPines

One of the longer-term trades I've got on is in the Euro/USD proxy ETF, FXE. I've posted a bit previously on my approach to FXE, which would be similar to my trading EUR/USD spot -- sell on strength. In FXE's case, I'm looking to sell on a particular flavor of strength, namely price of the underlying's movement back toward 112.5 or, more ideally, above that in a...

NaughtyPines

Ordinarily, I like to put on what I call a bread and butter trade on a weekly basis in one of the index ETF's (SPY, IWM, QQQ, or DIA) or in the go-to treasury ETF, TLT, as a "new" weekly options expiration becomes available 40-45 days out. With quite a few index and TLT trades queued up in my portfolio that have expirations between next Friday and 35 days out, I...

NaughtyPines

LULU announces earnings on 9/10 before market open, so look to set up your earnings play prior to the 9/9 NY close to take advantage of the volatility crush the underlying's options will experience post-earnings. Traditionally, I take a nondirectional bias with earnings plays since I do not know how the announcement will turn out and do not know what the market...

NaughtyPines

If you want to play the Chinese markets, you're largely relegated to FXI or ASHR. So which do you play from an options standpoint? With IVR in FXI at 92 and at a comparable 89 in ASHR, is it a rock, paper, scissors type of decision? I would say "no," and for a very simple reason: liquidity. While FXI isn't great from a liquidity standpoint, ASHR is, quite...

NaughtyPines

With my broad index ETF (SPY, IWM, DIA, QQQ) queue kind of full, I've been looking at other high volatility plays to keep capital in play. One of the sector ETF's that has reappeared on my radar is IYR (iShares U.S. Real Estate ETF). With an IVR of 85, it is ripe for a premium selling play. Traditionally, I look for a setup that is around 45 DTE, which would be...

NaughtyPines

Several weeks ago, I began to set up laddered short call verts in FXE (the EURUSD proxy). My original idea was to set up short call verts at 112/115 at varying expiration from here through December or January based upon the notion that the Fed was poised to tighten and, now, it appears, based upon the possibility that the ECB may initiate additional easing. As I...

NaughtyPines

It is entirely possible that I may have jumped the gun slightly with my UNG seasonality play, as prices continue to hover around the range low that has been in place since late April. However, this may provide an additional opportunity to add to my Jan expiration 12/13 debit spread position at more favorable prices. I am, though, going to continue to watch...

NaughtyPines

Ordinarily, if you're a price action kind of trader, you are generally looking for a series of lower highs/lower lows (in a downtrend) or the converse in an uptrend ... Or price's adherence to previously tested areas of support and resistance within a range. With SPY (SPX500 shown here), long term anything (i.e., up, down, or sideways) is unclear since the 8/20...

NaughtyPines

Depending on where you live, you wouldn't think that winter is fast approaching, but it will come at some point, and with winter comes cold, and with cold comes increased heating of homes ... . Hence, a seasonality play in UNG comes to mind, particularly with UNG trading at or near range lows (it's been between 12.25 and 15.25 since late January). Moreover,...

NaughtyPines

The more IV, the merrier if you're a premium seller. This week's earnings play in COST (Costco; announcing on 9/2 after market close), needs to be "merrier" if I'm going to make a play in it. Although it's IVR is currently 67 (52-Week TOS), I generally prefer to sell premium in an individual, non-ETF underlying if the IVR is above 70, and I would generally...

NaughtyPines

To me, there's no reason to resort to trading in individual underlyings when IV is high enough in the index ETF's to play with. But I can understand why some traders might be dissatisfied with just trading SPY, IWM, DIA, and QQQ. Quite frankly, pretty boring stuff, since it involves some waiting until IV is high enough to be worthwhile, and the droughts can last...

NaughtyPines

For several months, we enjoyed 100-point range-bound trading between 204 and 214, but 204 has now been blown, so now where is this thing likely going to go? As a premium seller, I don't in fact care all that much, as long as price stays between my short strikes for the duration of the contract. That being said, it was awfully nice to trade the top at 214 with...

NaughtyPines

This past week's been a busy one, occupied with managing the delta in index ETF trades with price gyrating all over the place (in breach, out of breach, in breach ... . Yeesh.) Now that things have calmed down a bit (and I've got most of my setups as delta neutral as practicable), I'm looking to put on some more trades while the indices sort themselves out. A...

NaughtyPines

As a bread-and-butter, premium selling, index ETF trader (SPY/IWM/DIA/QQQ), low volatility environments are not favorable for my type of trading. My alternatives are to either just sit on my hands and wait for volatility to return or do something else, such as earnings plays or VIX trades. For some reason, I have taken a liking to shorting SVXY as compared to...

NaughtyPines

We're still here ... . Locked in the same range we've been in since mid-March between 2040 and 2137 and basically, smack dab in the middle of that. Unfortunately, the volatility here in SPY at this moment is less than awe-inspiring (TOS 52-week at 22), with other index ETF's but modestly better (DIA, 36; QQQ, 33; IWM, 34). Assuming a measure of volatility...

NaughtyPines

Let's face it. No one really likes to roll their options positions to a later expiry, but sometimes you just have to, whether it is to give the trade a bit of additional time to work out or to mitigate your loss. Here are some basic guidelines I use regarding rolling where there has been a breach of a side of your iron condor or short strangle: 1. Always ...

NaughtyPines

The only earnings play on my radar for next week is BABA. Although there are others, I generally focus on those with good liquidity as evidenced by the bid/ask spread for the options I am looking for fills in (ideally, I'm looking for a <.05 spread, although I'm flexible with this, particularly with heavyweight underlyings like AMZN, GOOG, and the like). In...