[Options] Putting Time on Our Side
Steve Strazza brought up charts of the energy, materials, and commodities sectors on today’s Flow Show. These are “peer indexes,” meaning they often trend together.
And the current trends suggest we need to add more bullish positions in these areas.
The one name that stood out the most was Freeport McMoRan $FCX:
But given the run we’ve already seen here, we need to allow for the possibility of some digestion which may put a governor on the speed on any breakouts from here.
To position ourselves for this possibility, we’re going to utilize a Call Calendar spread.
Here’s the Play: [Read more…]
[Options Premium] A Failed Breakout Leaves Juicy Premiums In Its Wake
We put on a bullish bet in biotechs a couple of weeks ago and it quickly rolled over on us. The market had other ideas.
Now here we are, a couple of weeks later, and the biotech ETF $XBI finds itself mired in a range with rising implied volatility signaling elevated options premiums: [Read more…]
[Options] There Could Be a Lot of Juice in This Squeeze
We’re getting into Squeeze Season.
The stock market (as measured by the indexes) continues to trek higher, speculative fervor keeps building (as measured by what’s happening in crypto), and these forces are combining to make it a dangerous environment to be caught short in.
And if you’re short a name that already has a high short interest? Look out!
So naturally, today’s trade is a play on punishing the stubborn shorts in a particular stock that look like they are on the verge of getting epically squeezed.
In today’s Flow Show on Stock Market TV, me and Strazza get into why we love buying short-dated calls in Carvana $CVNA:
And here’s the chart that we are leaning into:
Here’s the Play: [Read more…]
[Options Premium] This Hundred-Dolla-Roll Might Happen Fast
Today’s trade comes in a wholesale distributor of industrial and construction supplies. Sexy, right?
Ok, maybe not. But the fact that the stock has been in a steady uptrend since November, is making new all-time highs, and has a “hundred-dolla-roll” in its sight certainly makes it very attractive to me. [Read more…]
How I Use Trailing Stops
[Options Premium] Fade the Street
Today’s trade is in a name that doesn’t need Wall Street.
They crush their little corner of the world, operating in the midwest. They do not need to raise money or any exotic financing. Because of this, the company is completely off Wall Street’s radar. This means very few (if any?) analysts cover it. Nobody is publishing research reports on it. Essentially, there just isn’t anyone talking about it.
Around here, we call these “Eddy Elfenbein stocks.” Stocks that are steady dividend payers, operating excellently in obscurity, providing a product or service that so many people use that they don’t even realize they are using it. [Read more…]
[Options] Reliance
On today’s Flow Show, me and Steve Strazza put our heads together to follow the wave into the Steel sector.
Sector trends are showing us where capital is flowing and that led us to a trade idea in steel manufacturing company Reliance Inc $RS.
Here’s the chart highlighting a high consolidation that often portends to rapid near term price acceleration:
For those of us who are comfortable with risking higher dollar amounts in trades, I’d be a straight buyer of the September 350 calls.
But I prefer keeping my costs a little lower per unit of risk, so I’ll be employing a call spread here to express our bullish opinion.
Here’s the Play: [Read more…]
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