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Bear or Bull? We got bothAMEX:SPY 📊 AMEX:SPY Options Range: $572 to $574.73 📜 $574 CALL 10/18 Entry: 15-30 min CLOSE ABOVE $574.73 Target: $578 📜 $574 PUT 10/18 Entry: Rejection and 15-30 min CLOSE BELOW $574.73 Target: $572, Trend support (Currently at $571) A rare occurrence of a green September. We expect extremely high volatility over the next 4-6 weeks, especially considering the election and the polarizing nature of the candidates. We could see heavy volatility within the semiconductor space. A 10-15% pullback in semiconductors would also bring down the major indices as they are a heavy component. We have seen how fragile this market is (8/5/24). Last week, our call went for 60%+. This week, let's see.
AMEX:SPY
by PennyBois
$SPY Weekly Options | Bull or Bear? We got both covered!AMEX:SPY We are seeing a clear technical pullback, but nothing trend breaking. 21EMA on the weekly is our guide. We are watching $550 as our pivot this week for our options contracts. For these contracts, we will be using the 15 or 30 minute chart and candle closes for confirmation. $555 Call 9/27 Entry: 30 minute close OVER $550 Targets: $555, $559.58 Stop-loss: 15 or 30 minute close UNDER $550 $545 PUT 9/27 Entry: Break above $550, 30 minute close UNDER Targets: $545, $540 Stop-loss: 15 or 30 minute close OVER $550
AMEX:SPY
by PennyBois
Option Chain Before Earnings - $NVDA huge CALL skewThis week, keep an eye on NASDAQ:NVDA , which will release its quarterly earnings on Wednesday. Here are this week’s earnings releases implemented by the TanukiTrade Options Overlay indicator for Tradingview: 08/28 Wednesday after market close: NVDA , CRWD , CRM 08/29 Thursday after market close: MRVL The Options Overlay indicates that NVDA's call skew is above 55% at 54DTE, meaning that CALL options are priced 55% higher than PUT options for the binary expected move distance . This suggests that the market is pricing in a strong upward move. The yellow curve represents the binary expected move, while the blue curve shows the 16-delta OTM options. The green rectangle highlights the area where you can potentially profit from the butterfly trade if the earnings report meets bullish market expectations. Upward price levels: 7/8 - 138 8/8 - 150 Downward price levels: 6/8 - 125 5/8 - 112 If you agree with the market’s bullish sentiment, one of the best R:R trades might be a directional NVDA call butterfly. You can buy it for $109 with the nearest Friday expiration, with a maximum (theoretical) profit of nearly $900. It’s worth executing this trade before the earnings announcement. Note that the green dashed line is theoretical; while it's not a traditional trendline according to classic TA, the long-term upward trend is still quite clear Expiry: Aug 30 Legs: 1x140C -2x150C + 1x160C Net debit: ~$100 Max profit: $890
NASDAQ:NVDALong
by TanukiTrade
$BABA volatility pricing skew on CALL side before earningsThe high vertical CALL pricing skew on the options chain shows that the CALL options for the September expiration are already much more expensive than the PUT options at the same expected move distance. This suggests that market participants are pricing in an upward move. Let's take a closer look at the probability curve formed by the options chain. I'm very curious to see whether the 8/8 to +1/8 quadrant line will hold the price for BABA, or if it will continue to surge into the Upper Extreme quadrant, heading towards +4/8 until $100. If everything stays the same, something like this could be an interesting lottery ticket for me. I'm thinking about an OTM call butterfly with a short expiration before earnings. I have to admit, I’m not a big fan of risking on this red/black roulette type of play, but if things stay as they are, I might consider combining it with a 40 or 68DTE credit put ratio below and the call butterfly above before earnings. But we'll see how things look on the day before earnings!
NYSE:BABA
by TanukiTrade
IBM International Business Machines Options Ahead of EarningsIf you haven`t sold IBM before the previous earnings: Now analyzing the options chain and the chart patterns of IBM International Business Machines prior to the earnings report this week, I would consider purchasing the 185usd strike price Calls with an expiration date of 2024-9-20, for a premium of approximately $7.10. If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
NYSE:IBMLong
by TopgOptions
Buy call option – at the money / in the money / out of the moneyDefinitions Buy call option – a stock option is the right to buy a stock (but not the obligation) at a certain price for a limited period of time. The price at which the stock may be bought is called the striking price. Three terms describe the relationship between the stock price and the options striking price: At the money / In the money / Out of the money For example; stock XYZ trade at $100 At the money – the strike price of the option is $100 In the money - the strike price of the option is $90 Out of the money – the strike price of the option is $110 The strike price is one of the 6 factors that determine the price of the option. Those factors are: 1. The price of the stock 2. The strike price of the option 3. The time until the option expires 4. The volatility of the stock also called “implied volatility” 5. The risk-free interest rate (usually the 90-day treasury bills) 6. The dividend rate of the stock. The last two have less influence on the option price. The option pricing has two elements, “time premium” and “intrinsic value”. In this post, I’m not going to elaborate on those two. (But they are important to understand). The Delta The delta of an option is the amount by which the call option will increase or decrease in price if the stock moves by 1 point. The values of the delta are between zero to one, if the call option is in the money the delta is closer to 1 if the call option is out of the money the delta is closer to 0. For example; if the stock option has a delta value of 0.8, this means that if the stock increases or decreases in price by $1 per share, the option price will rise or fall by $0.8. The option pricing is based on a partial differential equation because of that the behaver of the option pricing is not linear, as we can see from the charts. In the right chart, we see In the money option with a delta of 0.92, meaning the option price is behaving very similar to the stock price, we see that the lines are nearly flat. In the left chart, we see Out of the money option with a delta of 0.12, meaning the option price does not move like the stock price, for every $1 the stock will move the option price will move $0.12. Also, note the difference between the profit lines, to make 3 points with In the money option the stock needs to move to above $190, but the Out of the money option needs only to move above $145. This was the profit side, the losing side as you can see if the stock will remain at the same place the In the money options will break-even while the Out of the money options will expire worthless and will lose 1 point. The options that were used (input): Right chart: Option price -> $25.9, Stock price -> $115 , Strike price -> 90$ , Interest rate -> 0 , Days to expire -> 56 , Implied volatility -> 40.8% Left chart: Option price -> $1.17, Stock price -> $115 , Strike price -> $140 , Interest rate -> 0 , Days to expire -> 56 , Implied volatility -> 40.8% One option contract is the right to buy 100 shares so the cost for the options would be: $2590 and $117 respectively, not include commissions. For clarification: If you hold it to expiration and it is not worthless, that means you need to buy 100 shares at the strike price, $9000 in the right chart, $14,000 in the left chart. (not include what you already paid)
NASDAQ:AAPLEducation
by ZoharCho
17
Visualize $TSLA CALL pricing skew due to the upcoming earningsLet’s take a look at our new tradingview options screener indicator to see what we observe, as the options chain data has recently been updated. When we look at the screener, we can immediately see that NASDAQ:TSLA has an exceptional Implied Volatility Rank value of over 100, which is extremely high. This is clearly due to the upcoming earnings report on July 23rd. As we proceed, we notice that Tesla's Implied Volatility Index is also high, over 70. This means that not only the relative but also the absolute implied volatility of Tesla is high. Because the IVX value is above 30, Tesla’s IV Rank is displayed with a distinguishable black background. This favors credit strategies such as iron condors, broken wing butterflies, strangles, or simple short options. Next, let’s examine how this IV index value has changed over the past five days. We can see it has increased by more than 6%, indicating an upward trend as we approach the earnings report. In the next cell, we see a significant vertical price skew. Specifically, at 39 days to expiration, call options are 84% more expensive than put options at the same distance. This indicates that market participants are pricing in a significant upward movement in the options chain. The call skew is so pronounced that at 39 days to expiration, the 16 delta call value exits the expected range. This signifies a substantial delta skew twist, which I will show you visually. We see a horizontal IV index skew between the third and fourth weeks in the options chain. This means the front weekly IVX is lower than the IVX for the following week, which may favor calendar or diagonal strategies. Hovering over this with the mouse reveals it’s around the third and fourth week. In the last cell, we observe that there’s a horizontal IVX skew not just in weekly expirations but also between the second and third monthly expirations. Now, let’s see how these values appear visually on Tesla’s chart using our Options Overlay Indicator. On the right panel, the previously mentioned values are displayed in more detail when you hover over them with the mouse. The really exciting part is setting the 16 delta curve and seeing the extent of the upward shift in options pricing. This significant skew is also visible at closer delta values. When we enable the expected move and standard deviation curves, it immediately becomes clear what this severe vertical pricing skew in favor of call options means. Practically, market participants are significantly pricing in upward movement right after the earnings report. Hovering over the colored labels associated with the expirations displays all data precisely, showing the number of days until expiration and the high implied volatility index value for that expiration. Additionally, a green curve indicating overpricing due to extra interest is displayed. Weekly expiration horizontal IVX skew values appear in purple, and those affected by monthly skew are shown in turquoise blue. The 'Lite' version of our indicators is available for free to everyone, where you can also view Tesla as demonstrated. Pro indicators are available more than 150 US market symbols like SPY, S&P500, Nvidia, bonds, etfs and many others. Trade options like a pro with TanukiTrade Option Indicators for TradingView. Thank you for your attention.
NASDAQ:TSLAEducation
by TanukiTrade