MCD put sale for February expirySell the $155 put for February for $0.55 or higher. Looks like it will be close if the market keeps selling off.
There is support around $160 at the 200 day SMA.
Options-strategy
Put sale on MU for February normal expiry?MU opened and closed below its 100 day SMA on the daily time frame. I can definitely see some more downside down to $39 and maybe even the 200 day SMA on the daily time frame, which is also the 50 day EMA on the weekly time frame.
Weekly chart:
Considering a $37 Feb put sale for a limit of $0.40 or better. I wouldn't mind owning shares in MU :-)
$NFLX Feb 250 Call options$NFLX Feb 250 call options up over 1,900% in one week. It took bitcoin a whole year to make that type of returns.
LRCX Showing Bullish Charts Leading into Earnings tonight Trend Analysis:
-->Looks to be breaking resistance at $215. Strong earnings will likely allow the price to break through.
-->Hit support early today around $208
Indicators & Overlays:
-->MACD looking to cross over close to 0
-->DMI+ looking to cross over DMI- in an upward trend
-->RSI showing resistance at 40 and moving upward back to the 80 range
GE - Time to bet on a rebound?THE BACKDROP
GE closed at $32.25 on Dec 20 2016, at the top of its long term trading channel. The stock has lost 50% since, closing at 16.26 yesterday. This downfall has been ugly, with heavy selling volume, especially most recently. There is no telling how much lower the stock will go. Currently, the stock looks oversold on all time frames and could be ready for a bounce-back on any marginally positive news - Perhaps as early as this week when the earnings are announced and we start to hear about measures to fix the business…
THE TRADE
I do not like to catch falling knives, and would not normally be compelled to enter a stock with disappointing fundamentals and such an ugly technical configuration. However, there is an options trade which looks interesting at this stage, and might be worth considering ahead of earnings publication in 2 days. Look to get synthetically long close to the money, and to finance such position by selling a longer, further OTM put.
THE SETUP
1. Sell $15 SEP PUT and cash in $0.94/share (indicative).
2. Buy $17 JUN CALL and pay $0.92/share (indicative).
THE OUTCOMES
If the stock trades up, capture synthetically the full upside.
If the stock trades down, the worst case is to hold GE at $15.
If the stock remains range-bound —> No impact.
THE ALTERNATIVE
For those looking for risk-less opportunities, and do not mind paying for them, look to trade only the second leg (buy call)...
BABA - Triple-topping: What to do with the upcoming earnings?BABA’s exceptional run seems to be triple-topping. While the long-term trend remains up, the short and mid-term pictures look like they have turned to the downside. The company should announce earnings on Feb 1 before market open and I would wait for this catalyst to go long, just in case any fundamental disappointment should take us lower to confirm the poor, current technical picture. In line with the strategy I proposed on NFLX (see below), the game consists in buying synthetic upside exposure ahead of earnings. If the stock breaks out, you will be exposed to the upside. If the stock remains range-bound, you will lose a small premium. If the stock disappoints and tanks, you could decide to lose your premium or to sell a put to make your lost premium up.
1. BUY BABA Feb 16'18 $182.5 CALL = $6.90 (3.78%)
OR
2. BUY BABA Feb 16'18 $192.5 CALL = $3.32 (1.82%)
A SIMPLE BUT EFFECTIVE OPTION WRITING STRATEGY.A simple but effective option wrting strategy for a monthly income:
Underlying concept :
a) Strategy - Writing nifty call and put options simultaneously.
b) Strike selection - Call and put strikes approximately above / below 100 points from market price at the time of entry.
c) Adjustment post position - For every 100 point or close to 100 point change in nifty, square both call and put and write fresh call and put as per point b. Continue this till expiry.
Example:
A) 01/01/2018 - Nifty at 10435
1) Write 10600 strike call at 76.
2) Write 10300 strike put at 64
B) 05/01/2018 - Nifty at 10558.
3) Square off s.no.1 at 90 with a loss of 14.
4) Square off s.no.2 at 36 with a profit of 28.
5) Write 10700 call at 47.
6) Write 10400 put at 55.
C) 11/01/2018 - Nifty at 10651
7) Square off s.no 5 at 61 with a loss of 14.
8) Square off s.no.6 at 29 with a profit of 26
9) Write 10800 call at 26.
10) Write 10500 put at 44.
D) 15/01/2018 - Nifty at 10740
11) Square off s.no.9 at 43 with a loss of 17.
12) Square off s.no. 10 at 20 with a profit of 24.
13) Write 10900 call at 16.
14) Write 10600 put at 32.
E) 18/01/2018 - Nifty at 10817
15) Square off s.no. 13 at 23 with a loss of 7.
16) Square off s.no. 14 at 15 with a profit of 17.
17) Write 11000 call at 7
18) Write 10700 put at 29.
F) 19/01/2018 - Nifty at 10895.
19) Square off s.no.15 at 17 with a loss of 10.
20) Square off s.no.16 at 12 with a profit of 17.
21) Write 11100 call at 4.
22) Write 10800 put at 23.
G) 23/01/2018 - Nifty at 11083.
23) Square off s.no.21 at 40 with a loss of 36.
24) Square off s.no 22 at 6 with a profit of 17.
and so on.....
Net PnL : -14+28-14+26-17+24-7+17-10+17-36+17 = 31.
Net PnL per lot : Rs 2,325
Margin required per lot (NRML) : Around 1,40,000 for both call and put.
No. of days in the above eg : 23.
Return : 1.6% for 23 days.
Annualised return : 26%.
A capital of Rs 10 lacs would provide an income of Rs 23k plus.
Assumptions :
In the above example, all prices taken at close of the day. Hence actual trading might not replicate the above return. There could be increase or decrease depending on the exact time of trade during the day. The above example assumes current month's maturity. Income can be increased by opting for next month maturity.
Risk factors:
This strategy is naked sale of call and put. Hence theoretically risk is unlimited and unknown while returns are limited and known. However, the unlimited loss scenario is a 6 sigma event, which is the underlying strength of writing options IF RE-ADJUSTMENT IS DONE AS AND WHEN REQUIRED. This strategy might end up in loss if there is a very significant gap up / down beyond the premium received.
Important:
I have not backtested this strategy. Use at your own risk. The objective of this is to share info and not a recommendation to trade.
AEP - May '18 Exp. Put Vertical Credit SpreadTrade details:
65/60 Put Vertical Credit Spread @ $1.00
Prob. of Max Profit = 70.13%
Prob. of Max Loss = 10.10%
Break-even @ $64.00
119 D.T.E.
Trade plan:
Entry by oversold + support/resistance analysis
Expecting $68.00 support level to survive possible test before earnings report next week for an uptrend continuation before May '18 expiration.
Using longer duration for some more premium + allow for adjustment if trade goes very wrong.
Expecting spread to expire worthless but will take early profit + place new trade with same bias around earnings if IV swells premium up enough to give a greater edge.
BX - Looking for yield? Covered short straddle on Blackstone!THE DAWN OF ASSET MANAGERS
As discussed towards the end of last year, 2018 should be the year of the brokers and asset managers (please watch related ideas below). In this context, and with a dividend yield of 6.36%, BX is probably one of the best asset management pure-plays out there. The trend has been strong on all time frames and the stock is attempting a breakout as we speak. But how to play it in the current top-ish market environment? There is a smarter way than a simple outright buy.
LOOK FOR YIELD AND ENHANCE IT WITH OPTIONS
1. Buy the stock in a half size which makes sense to your strategy or portfolio at $34.91 (last close)
2. Sell one-year $40 OTM CALL and pocket $1.39 (indicative)
3. Sell one-year $32 OTM PUT and pocket $2.66 (indicative)
COMPELLING RISK AND YIELD ANALYSIS
At expiration of the options, in one year, one of the below should happen.
1. The stock is range-bound ($32-40): Stay long the stock and pocket (call premium + put premium + dividend yield) = 3.98% + 7.62% + 6.36% = 17.96%
2. The stock breaks out and trades above $40: Deliver the shares at $40 and pocket (capital gain + dividend yield + call premium + put premium) = 14.58% + 6.36% +3.98% + 7.62% = 32.54%
3. The stock breaks down and trades below $32: Receive the shares and end up with a full position at an average price of $33.45 while you pocket (dividend yield + call premium + put premium) = 6.36% + 3.98% + 7.62% = 17.96% . All the while, you become long one of the best asset managers in the world with an improved dividend yield >10%.
THIS STRATEGY CAN BE ROLLED OUT WITH ANY TIME HORIZON (MONTHLY, QUARTERLY, SEMI-ANUALLY).
COMMENTS WELCOME.
67% Probability trade on OIH (Put Ratio+Call)With over 20% move to the upside in the last 29 days, I think is time for OIH to have some sort of pullback or correction. The last 5 candles couldn't close outside of the Upper Bollinger Band, so it looks like is losing momentum and most likely retrace at least to the midline.
Implied Volatility Rank is at 54 so I sold the 28/27 Put Ratio Spread (2 Short Puts at 27 Strike Price for each Long Put at 28). And also added some juice with a Short Call at the 30 Strike.
In total I ended up with $0.40 credit for each contract.
I did 5 of those, so it would be 5x10 Put Ratio + 5 Calls.
Between $30 and $28 I would be making $200, and my max profit of $700 would be at the $27 price (around where the 20MA is). This trade will make profits between the $25.60-$30.40 Price, this gives us a 67% chance to make money.
The trade:
Long (1) 28 Put
Short (2) 27 Put
Short (1) 30 Call
Total Credit was $0.40 per contract
Probability of Profit 67%
SPY OPTION OUTLOOKSmall correction until End of Month. Breakout from Regression trend. Could see bullish through Februrary before possible correction in Q2. I like Iron Condor at 272-275 Strike with 30 Days and Strangle Options at 277 strike end of Q1 from 41 to 60 days out . Always do your DD. This is not professional advice.
Strangle on XLE (58% probability)With the strong move to the upside, I am betting that we are starting a new auction between 78 and the 71 levels. So with an Implied volatility Rank of 37, I sold a Strangle at the 30 deltas for a $1.36 credit. As long as the price stays between $78.35 and $71.65, we will be making money.
The Trade:
Short 73 Puts
Short 77 Calls
Credit $1.36 per contract
58% Probability of profit
Is this the rebound of the metalsquietly the XME has broken out of a 2017 lull, and with that we go long..
a few ideas how to play this
1. Poor Mans Covered Call
2. Sell puts..
Both situations seem decent, but if you look at the possibility of being wrong, the PMCC offers the least amount of pain and suffering. Lets explore
if selling puts, using Delta30... we will be getting $53 and using 989 in margin for Feb 02 34 Puts... The key here is that 34 is the prior resistance/ now support...
if buying a PMCC
Sell 1 contract of XME 2018 19-JAN 36.00 CALL @ $0.45
Buy 1 contract of XME 2018 15-JUN 34.00 CALL @ $3.00
Current Stock Price : $35.22
Break Even #1 : $34.58
Break Even #2 : $40.25
Total Requirement: $254.50
Put Guarantee Price: $0.00
Max Risk: $254.50
% Max Risk: 100.0%
Max Profit: $90.00
% Return: 35.4%
I will be using the PMCC model, as it will allow a greater return, and less pain if wrong... also the possibility to continue writing calls for 6 more months
New Long Available on VZ after last trade hit TPAnother WK demand area created with 3M Demand in control. Previous trade posted hit profit target last week.
Ryanair #RYAAY long term longs at monthly demand levelStrong Monthly demand imbalance created around 86 price area on Ryanair Holdings. Long term bias at monthly and weekly demand levels in a clear uptrend, buy at monthly and weekly demand zones
New weekly demand levels created on EOG Resources american stockNew weekly demand levels created on EOG Resources american stock around 97 and 85.75 respectively with monthly demand level in control and in a clear uptrend. Long bias at new imbalances
Discovery Financial Services DFS buy setup at weekly demand zoneAmerican Stock DFS Discovery Financial Services has a clear long bias. Price fell short of retracing to this weekly demand zone around 57 area. Brand new weekly demand level, that imbalance around 59.55 has a very strong and explosive bullish impulse. New demand levels are being created, supply levels are being eliminated. Longs at weekly demand zones for a long term investment.
Crude Oil Short Term SELL (15 Hours)Looking at Supply level on the D chart. Only 15 hours left in the contract. OTM (Out of the Money) short position. Risk is 36 to make 64 per contract.
Tesla Coil (Ha. Ha.)Some volume came in this morning for a nice green day, keeping this coil formation nice and tight. I'm in october 6 calls in anticipation of the semi truck announcement (which is said to be happening this month). Still early, may not break the coil to the upside yet, but I like my chances with the bull market still strong. Tomorrow I'll be watching for a weak open to risk $50 on sep 8 calls. If it pops out of the coil tomorrow, that'd be huge potential gains. This is becoming my favorite play. I missed the last two fridays when BIDU made 20x and 45x gains, not gonna miss tomorrow if it happens in FB, NVDA, BIDU, NFLX, or TSLA. Watching closely
Wheat flat to upI have a big picture tool I use that has been very good to me and it is now indicating shorting puts in wheat will be a good spot to take advantage of a sideways or climbing wheat prices. I will trade the 31 DTE options and will move down to the 30 delta strike put to give it a bit of wiggle room. Not a big trade but not much buying power is used either
