The bull market in energy, oil, and resource names continues. And elevated options premium continues.
Today’s trade is exploitation of both of these themes. Let’s get right to it.
Expert technical analysis of financial markets by JC Parets
The bull market in energy, oil, and resource names continues. And elevated options premium continues.
Today’s trade is exploitation of both of these themes. Let’s get right to it.
I feel like this has been the lead for many blog posts recently, but the trend continues: options volatilities continue to remain elevated across the board with $VIX holding above 30, and this makes me want to continue favoring strategies that are net short options premium.
But with the trade today, we’re going to leverage options premiums to help us finance a bullish bet on NASDAQ stocks.
It started out with JC and I wanting to simply sell premium, but when we looked into $QQQ options it became pretty clear that we could get paid handsomely if recent lows end up becoming a pivot to higher prices and we took some put premiums to buy out-of-the-money calls. [Read more…]
With VIX closing the day today north of 30, I’m still on the hunt for premium selling opportunities.
So as always, I perused my list of the most liquid options ETFs and found an opportunity where premiums are elevated and the chart suggests some rangebound trading action is likely over the next few weeks.
The day got away from me so I didn’t get a chance to put it on yet, but I’ve identified a delta neutral candidate that I’ll be looking to enter in the early going tomorrow AM. [Read more…]
Wild market conditions persist! Yesterday, stocks had a huge gap down opening, but then spent all day ripping higher and closed convincingly in the green. Today, the rally picked up right where it left off.
Talk about whiplash!
This makes it incredibly challenging to find directional bets with any degree of confidence. So, with implied volatilies elevated across the board, today we’re hunting for another delta-neutral premium selling candidate.
And this time, we’re doing it on an individual stock.
Markets continue to be “messy” and it’s tricky looking for positions to take aggressive stances in. And with VIX hovering at or near the 30 level for the better part of the past week and a half, the option trader in me continues to look for opportunities to sell premium.
A smarter man than me once told me: “If something is working, find ways to do MORE of it!”
Well, selling premium on balance has been working pretty well since January, so…
Chatting with the team this morning, one pocket of strength we identified that has been holding up relatively well in this slop is the banking sector. And while there weren’t any individual names we were willing to bet the farm on, the financials sector ETF $XLF caught our attention as a good possible candidate for a delta neutral credit spread. [Read more…]
No, it’s not April 15th just yet. But I’m getting into that zone where I need to start sending relevant info to my accountant to get the ball rolling for my 2021 tax return.
I hate that I have to farm out my tax return preparation to a professional in order to get them done. I wish the US tax code wasn’t the way it was – who doesn’t?
But let me relate a little story to you that might get your mind right about whether or not to go it alone when doing your taxes…
I don’t remember the year, but it was somewhere around 2003-2004 when I first moved to Chicago. I had been using an accounting firm to prepare my tax returns since I began trading in 1998. But this year, I thought to myself:
“Sean, you’re smart. You’re college-educated. You almost minored in accounting, and you had straight A’s in all your accounting classes. You should be able to handle the filing of your own taxes!”
So I don’t remember if it was out of an act of curiosity, boredom, or just trying to pinch a penny, but I decided that year I’d prepare my own taxes.
I read all the official instruction manuals provided by the IRS. I gathered all my necessary trading documents. And I followed every procedure to a T. I left no i’s undotted, no t’s uncrossed.
After all the work was completed I had determined that I owed the IRS somewhere in the neighborhood of $4,000. Never happy about owing the IRS money, I nonetheless accepted it. It felt right. It felt fair. And I was prepared to send the return and my money off.
But before licking the stamps, on a lark, I decided maybe I should have an accountant ALSO prepare my taxes to compare notes. Let’s see how well I did? [Read more…]
From this week’s Follow the Flow report, it’s clear that options players are betting on the house!
And recent market action is giving us a nice pullback to get positioned into, increasing our odds of success if the dealer plays his cards right.
So let’s take advantage of the price action and position ourselves to win.
Somebody tell the waitress to send over another round of complimentary drinks!
If you’ve been following our narrative this week, you know we’ve been preaching patience as the stock market is most decidedly in the “chop zone” right now. Me and JC did a live twitter stream on Wednesday afternoon discussing the situation and how we don’t feel compelled to force any new trades.
That is still the situation. But one name that I’ve been watching for a delta-neutral credit spread has moved in the last two days in a way that gives me a little more confidence that now may be a good time to get involved. [Read more…]