If I was a long holder of big positions in $AAPL, $AMZN, $TSLA, $FB, $GOOG — any of the teracaps…. I’d be selling way OTM covered calls like a wild man here.#SKEW
— Sean McLaughlin, NLD 📈 (@chicagosean) September 1, 2020
Covered Calls is not a strategy we employ often at All Star Options, as there are better more efficient ways to use our capital to express similar bets.
But for any of you reading this who may be holding legacy long positions in stocks in the biggest names and highest flyers in the universe right now (think “FAANG” stocks, and your TSLA’s and Zoom’s and Peleton’s, etc), we’re seeing an unusual situation where many of these names are exhibiting skew that is resulting in options prices for upside calls being more expensive than downside puts an equal distance away. [Read more…]