I think it’s fair to say we options traders — and really all traders — see and think about the world around us differently. I mean, who has conversations like this? [Read more…]
[Options Premium] Slippery Sideways Action
I’ve been noticing some mostly sideways action in the oil & gas space in recent months. And with premiums somewhat elevated in options, delta neutral income strategies become extremely appealing.
Selling premium when options volatility is relatively high is a repeatable edge that plays out in my favor over time. So I like to put myself in position to take advantage of these situations as often as I can — ideally when the underlying is caught in a range and my analysis indicates the range is likely to continue. [Read more…]
[Options Premium] Quick Hit Breakout
I found a stock where earnings have come and gone with little impact upon the overall trend, volatility collapsed (predictably), and now the only question left to ask is: when does the Santa Rally begin? [Read more…]
Playing for a Face Ripper
Oh boy. I love when my boy JC gets fired up on an idea.
In a recent piece on copper and emerging markets, here’s JC:
Have you noticed that with Tech and Software and other areas grinding sideways or lower, we’ve seen a consistent bid in Emerging Markets? …I really think the squeeze is on.
He was a little bit more, um, verbose in an email header sending this piece to his subscribers that read:
Emerging Market Shorts Will Get Their Faces Ripped Off
LOL.
Well, I’m game. Let’s do this. [Read more…]
[Options Premium] Time For a Big Move to Consolidate?
One of our bigger directional wins this summer/fall is showing signs of taking a breather, but traders with a memory are still keeping a bid under options prices. This is setting up the potential for a nice “income trade.” When volatility is high (and therefore options premiums are juicy), and my bet is some sideways action in the near-term, these are the ideal situations to employ delta-neutral credit spreads. [Read more…]
[Options Premium] Targeting a Hundy Roll
The S&P 500 is back near highs. Call me crazy, but bullish setups in this environment with low volatility in the options get my antennae up for my favorite bullish strategy — the simple long call. (Keep it simple, slugger!) [Read more…]
[Options] Using Vertical Spreads to Manage Long Call Positions, Part 2. #BallersOnly
Warning: This aggressive strategy is only for those who are comfortable with risk and want to Bro Down 😉
In a previous post, I discussed using Vertical Spreads to roll long in-the-money calls up to protect profits while not giving up the dream of higher prices. Any time I’m holding long calls that are way in-the-money, this is a viable option to help me take money off the table — freeing it up to be redeployed elsewhere — but still leaves me a chance to participate if the stock continues moving higher (in the off-chance I didn’t perfectly call the top /sarcasm).
I promised an aggressive cousin to this strategy and here it goes… [Read more…]
[Options Premium] Bullish Low Vol Setup into New All Time Highs
Sifting through all the trade ideas from the latest All Star Charts Quarterly Playbook, I happened upon a stock that is still several weeks away from earnings, is just a touch below all time highs, is trading at its lowest volatility of the year, and has a clearly defined risk management level. As you can imagine, this is pretty damn near the perfect set up for my favorite options play… [Read more…]
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