The ASC team is out with a piece calling for a potential short-term bottom in the Energy space. I’m liking some of the setups I’m seeing and I’ve got an options play to get us involved. [Read more…]
[Options Premium] Submerging Markets?
JC is out with a piece today that is bearish on Latin America broadly, and more specifically, Mecradolibre $MELI.
Here’s the money line:
Here is the chart showing Mecradolibre failing once again near this 677 level that has been trouble since last year. There is clearly still an overwhelming amount of supply here. The bet is that $MELI gets back down to 517, which would put it near the lower end of this multi-year range:
The stock is expensive so if getting short a $650 stock feels pretty unappealing to you, I’ve got an options trade that may be more palatable. [Read more…]
[Options Premium] Fade the Noise
It’s been an interesting couple of weeks, eh? Tesla put on a show, Coronavirus, we’ve gotten a little two-sided action in the broader markets, and volatility reminded us it still exists. But as we know, volatility fades. And right now, there is some elevated premium levels too tempting to ignore. So we’re selling some premium here. [Read more…]
[Options Premium] February 2020 Conference Call Video Recording
This is the video recording of the February 2020 Conference Call for Members of All Star Options [Read more…]
[Options] February Expiration Open Positions Review
As February gets under way, it’s time to review positions with February options that remain open (haven’t already hit profit targets or been stopped out).
Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice — it’s time to take action.
February positions closed at profit target: $GDX (1/16)
February positions closed at a loss: $SLB (8/13), $LGIH (11/6), $MDT (10/23)
Remaining Open Positions (in order of entry):
- $DHI Long Feb 55 calls: We entered this position in August at $1.60 per contract. We sold half of our position at $3.20 on October 17th. We’re still holding our remaining position and the calls are currently in-the-money. The level I’m currently watching is 58.50. If $DHI closes below that level, I’ll close my position and whatever I get for those calls represents our total profit in the trade. If we hold these levels, I’ll next look to raise my stop loss level if/when $DHI breaks out to further new highs (above 61.77).
- $ABT Long Feb 90 calls: We entered this position in October at $1.20 per contract. We sold half of our position at $2.40 on January 22nd. Our timing on that exit was fortuitous as that date currently marks the high for the move. Unfortunately, our remaining calls are now out-of-the-money and theta is now our enemy. We’re closing out these calls here (currently bid 45 cents) and whatever we get represents our total profits in this trade.
If anybody has any questions, hit me here.
[Options Premium] It’s a Miracle!
“It’s a Miracle!” has probably been uttered through tears by stock market bears, news watchers, and particularly Tesla $TSLA bears repeatedly in recent weeks. We’re not sorry. If you ignore price action, well… that’s on you, friendo.
That said, we’ve got our own “miracle” play that is setting up nicely… [Read more…]
[Options Premium] Juicy Premiums
Well here we are, the first “panic” of 2020. Markets are selling off a bit, the TV and twitter birds are chirping, trying their best to get you to act irresponsibly in your portfolio. And maybe you’re even feeling a bit of unfamiliar heat on some of your long positions. Time to get scared, right?
Maybe. I dunno. But this I do know — fear subsides. And in options trading parlance, volatility mean reverts. I’m stepping in and selling the fear today. [Read more…]
[Options Premium] A Show of Utility
In a recent piece, JC laid out the case for why we should be considering some bullish plays in the Utilities sector. A bunch of the stocks mentioned have already broken out, but another one is setting up nicely today so we’re getting to work here. [Read more…]
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