51 days until expiration is the sweet spot for putting on delta neutral income trades. “Income Trades” are best established in underlyings experiencing elevated levels of volatility (resulting in higher options prices), but that are stuck within a price range. The thinking here is that volatility is likely to revert back to the mean and the underlying is likely to stay within it’s current range. Inertia, ya dig?
In coming weeks, All Star Options will be unveiling an Income Trades Heat Map which will help direct you towards the best ETF candidates for putting on these trades whenever you’re interested.
In the meantime, we’ve got a trade from the top of this list ready to go. [Read more…]