This is the video recording of the November 2018 Conference Call for Members of All Star Options [Read more…]
Options Affords Us Maximum Flexibility in Rapidly Changing Markets
Notice anything different the last couple weeks?
Unless you’ve been on an African safari during the entire month of October, you’ve probably noticed the dramatic shift in market tone. What has been working for the majority of the year has stopped working. The low-volatility, bullish setups playbook has been rendered ineffective in just a couple short weeks. As many of us were recently reminded, and many of you might be learning now for the first time, when market regimes change — the process is usually swift, messy, and confusing.
If you’re a long-only swing trader in this market environment, good luck. You’re probably in for a wild ride. [Read more…]
A New Options Opportunity in an Old Favorite
CSX has been good to us.
We’ve been bullish $CSX all year. And we had a successful options play this summer that recently came to a profitable conclusion. JC calls CSX “a beast!” I can’t argue with that.
And low and behold, even as the overall market has hit a little bump in the road over the past week, $CSX just continues riding the rails, appearing to be in the final stages of completing a nice and tidy two-month base with eyes on a $91 price target and above.
With earnings on deck, the chairs are aligned for an opportunistic play to put elevated options volatility to work for us. [Read more…]
Managing Options Positions Near Expiration
From time to time I like to review some of my Best Practices for my own benefit, but also for the benefit of readers of this blog, and for subscribers to All Star Options. So let’s get right to it…
This past Friday marked an important monthly date in the regular cycle of options expirations. Friday marked the line in the sand where we crossed under 21 days until October expiration.
Why is 21 days until expiration important?
In short: because of theta and gamma.
For long premium positions, theta decay starts to become a major drag, and increasingly so with each passing day. For short premium positions, gamma has the potential to produce wild swings in your position equity. Neither of these scenarios are very appealing for obvious reasons.
Lets breakdown the risks and actions to take for a variety of common strategies. [Read more…]
[Options Premium] October 2018 Conference Call Video Recording
This is the video recording of the October 2018 Conference Call for Members of All Star Options [Read more…]
Calendar Spreads Offer Three Ways to Win in this Current Environment
Sticking with a theme we’ve been discussing with All Star Options subscribers for the past month or so, we expect to continue keeping things simple around here until the market tells us it’s time to change.
One way we’ve been keeping things simple is to be buyers of straight long call options. It’s still a bull market in spite of what gets shouted to you on TV, and volatilities continue to be low — pricing options relatively cheaply. So as long as the volatility in any individual name is still cheap, we’re always going to be looking at long slightly out-of-the-money call options to participate in bullish plays while affordably limiting our risk.
One variant of this play that also holds a lot of interest for me — especially in higher priced names where I might wish to limit my risk a little bit more — is the long call calendar spread which consists of a short call in a near month combined with a long call at the same strike in a further out month for a net debit. It gives us three ways to win! [Read more…]
[Options Premium] Details For October 2018 Conference Call
This is the monthly conference call for Members of All Star Options. In this call we will discuss the current market environment and focus on price and volatility behavior. Throughout the session, J.C. Parets will add commentary on the technical outlook moving forward, and Sean McLaughlin will discuss the options strategies available to profit from the market activity.
This month’s Conference Call will be held on Tuesday October 2nd at 7PM ET. Here are the details for the call:
[Read more…]
[Options Premium] Hit ’em Low, Ride ’em High.
Continuing with a theme I discussed coming out of Labor Day Weekend, volatilities continue to remain low across major stock indices, within the majority of sectors, and by extension many key stocks. Until that changes, there’s no need to deviate from my current plan of keeping things simple. When bullish opportunities present themselves, it is pretty simple — I want to be long calls. There’s no need to overthink things here.
Not surprising, there is a stock on our radar that it is breaking out to all-time highs with options pricing in volatility near the lowest levels seen in the past year. A perfect candidate for straight naked calls. [Read more…]
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