This morning, the team was discussing a notable Board of Directors insider making a sizeable $5 million purchase of stock.
While an insider's buy isn't necessarily grounds for me to get interested in getting involved, it did catch our attention and after looking at the chart and the sector, it looks like a trade we'd like to get into--carefully.
In today's Flow Show, Steve Strazza and I assess the current market environment, post- whatever the hell we're calling what happened a couple weeks ago (Volmageddon 2?, Yen YoYo? The Carry Drop?).
It feels more and more like that was merely a footnote to an otherwise pretty robust bull market. We'll see.
Regardless, we're looking for bullish setups in this tape and an online retailer out of South Korea has our attention.
Feels fitting to position ourselves in a company that is known for going fast. Because if this bull market is about to resume its normal operation, then this company is likely going to lead us higher, quickly.
When the storm is upon us, it's too late to purchase hurricane insurance. Nobody will sell it to you. Of if they will, the prices will be obscene.
Last Monday, when the VIX printed a 65 -- it was too late to buy downside protection. If you did, you were asking for your face to be ripped off. And it likely was.
Now that the dust has settled a bit, volatility has abated significantly, and the relative winners and loses sorted themselves out, we're seeing some good setups to position ourselves for any additional downside action.
Additionally, it offers me a good chance to balance out some of the risks I still have on the books in my long positions.
It's fashionable in certain circles to talk about having a Canadian escape plan if shit gets too weird here in the United States.
I'm not one of those. Though I love Canada, having grown up across the border in Buffalo, NY.
There were many times in my younger days, while spending a day across the border, where I'd find myself short on cash and I'd have to hit an ATM to get some loonies! And most often, those ATMs were run by CIBC.
So maybe I should attempt to earn back some of those ATM fees (plus interest!).
The stock market likely has a couple of aftershocks left in it. But if the worst is over, I have to believe this is a great opportunity to buy the dip in some names that will be beneficiaries of the AI boom.
And there are few bigger and well-positioned names than Microsoft.
This market environment still demands that we define our risks and we're going to leverage elevated volatility in a way you might not expect to express our bet.
VIX is near its highest level of the year and this is being reflected in options premiums nearly across the board.
It's also earnings season, so we want to be careful not to get caught in any potential earnings-driven landmines.
With this in mind, I've got a big cap name that has already reported earnings, is trading in a range, and is still exhibiting elevated options premiums -- the perfect recipe for a delta neutral options trade.
In today's Flow Show, Steve and I put our heads together to find a good trade to take advantage of elevated options premiums in a big-cap name that may have seen the worst of the selling and is now may be putting in a pivot.
That name is Amazon $AMZN and here's the chart where it stands right now:
As can be seen in the chart below, $RSG has certainly been winning over the long run. And with this week's earning report sending the down 5%, it feels like a great opportunity to get positioned on the dip.
