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…]
Good Buy or Goodbye?
Earlier in the week, JC & I were chatting online about some possible trade opportunities, and we had the following riff on Microsoft $MSFT:
JC: Hey, $MSFT long straddles.Sean: You in? or are you asking if it’s a good idea?JC: I think it’s tight. It either breaks out and rips, or just get absolutely destroyed.Sean: Yeah. Vol is a little higher than I’d prefer for that trade. But if you think a move is imminent soon, I don’t hate it.JC: I think it breaks out. But like $XLK in October, if it doesn’t it’s over. It’s either a “good buy” or a “goodbye.”Sean: A couple more days of sideways action might lower the vol a little more, which would make me happy 🙂
Fast forward to today and $MSFT volatility has come in a smidgen.
The fact is, $MSFT has been in a $10 range since early June. I’d share a chart with you, but you’d be bored as the range has tightened even more in recent weeks into basically an $8 dollar range. To me, especially in this tape, $MSFT is beginning to look like a coiled spring that can pop in either direction. It just needs a catalyst. That catalyst might be coming on October 23rd when it announces its next earnings report. Or it could be something external in the ongoing Tariffs nonsense or some other clown show move out of Washington.
At the end of the day, the reason won’t matter. But any breakout from this range is likely to be met with some significant range expansion. [Read more…]
[Options Premium] A New Wrinkle on a Familiar Shiny Play
A funny thing about Gold is, people who have any kind of opinion on it are either EXTREMELY bullish, or EXTREMELY bearish. There tends not to be any middle ground. No surprise it is such a politicized instrument.
Well, I don’t care about any of that. What I do care about is volatility priced into options in this space continues to be pretty juicy at the moment while prices of many Gold underlyings appear to be stuck in a sideways holding pattern. (You won’t hear any talking head loudly yell on CNBC: “I THINK GOLD GOES SIDEWAYS!” LOL).
And the boys at ASC agree with me, having published a neutral opinion on it in their recently published ASC 4th Quarter Playbook. So let’s get into the play that makes most sense from here. [Read more…]
[Options] Rules are made to be broken
Quick little post offering a teachable moment in a currently open position on my books. [Read more…]
[Options Premium] Charge Back
Risk management is Rule #1.
Last month, I put a trade on that didn’t work out. Believe me, it happens (shocking, I know! /EndObviousSarcasm). There was a level that invalidated my thesis and it was breached. I don’t fight with price action. When price is speaking, I listen. So the trade was exited and I moved on, accepting my manageable loss.
Fast forward just one week from my exit and the chart has repaired itself and has established a newer, clearer level to lean my risk management against. My overall bullish thesis on this stock hasn’t changed, and now with new levels to observe, I’m going back in for a new try with a similar spread, but at new strikes and a new expiration. [Read more…]
[Options Premium] Bearish in Biotech
Geez… the calendar turned into October and traders are acting like Halloween is already here! The up-and-down trading action so far in the first three days of October can be downright frightening if you’re chasing every whipsaw in this schizo tape.
Considering my portfolio is leaning a bit long at the moment, it feels prudent to put some downside exposure on.
The biotech space has been a laggard all year. If broader markets still have additional spook in them, it is likely biotechs will lead the way. So I’m positioning myself accordingly. [Read more…]
[Options Premium] October 2019 Conference Call Video Recording
This is the video recording of the October 2019 Conference Call for Members of All Star Options [Read more…]
[Options Premium] Laughing on the way to the bank?
Ok, today’s title is a cheeky play on the ticker symbol I’m trading today. I couldn’t help myself.
Today I’m getting into a low conviction trade, but shifting the probabilities in my favor so that even if I’m wrong, I still have a good chance of reaching my profit objective. Pretty sweet, right? This is one of the many reasons I like trading options. [Read more…]
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