BOUGHT WLL COVERED CALLBought shares at 7.50; sold the Sept 30th 8 call; filled for a 6.93 db; max profit $107 (if called away at 8) (15.4% ROC).
Not to jinx it, but it's highly likely that I will be unhappy with one or more of these little fellas that I put on today ... .
Optionsstrategy
TRADE IDEA: AMD COVERED CALL/NAKED SHORT PUTMy "guess" is that AMD will not hold onto this level (I briefly considered going "monied" with the short call with the covered call setup, selling the 7 strike instead of the 8). However. implied volatility is fairly high here (64.6%), and my mechanical approach to most of these setups is basically to "ditch the guessing" and pull the trigger; price will go where it goes ... .
Covered Call Metrics:
Buy 100 Shares at 7.51
Sell Oct 21st 8 Call
Whole Package: 6.93 db (off hours; 6.93 will be my cost basis in the stock)
Max Profit: $107 (if called away at 8)
ROC%: 15.4%
Notes: As an alternative, I looked at selling a put in the Oct 21st expiry below current price. The Oct 21st 7 short put, for example, currently offers up .54 ($54) in premium at the mid. The notion there would either be to (a) keep the premium if AMD finishes above $7 at expiry; (b) look to be put the stock at $7 if it doesn't; or (c) roll the short put down and out for additional credit if price breaks $7. Anything below the $7 strike in the Oct 21st expiry won't offer you much premium at the moment (e.g., the 6 strike offers .25 at the mid, which approaches "not worth it"). At NY open, I'll probably just "flip a coin" as to whether I go with the naked put or the covered call.
WITH VIX SUB-15, PREEM SELLING OPPS ARE OUSTIDE BROAD INDICESAs I've posted several times before, my preference generally is to (1) sell premium in broad-based index instruments (e.g., SPY, IWM, QQQ, SPX, RUT) if VIX > 15; and (2) if VIX < 15, look for premium selling opportunities in non-index exchange traded funds with implied volatility of >35% and/or individual underlyings with implied volatility of >50% and where the implied volatility percentage is in the 70th or greater percentile for the preceding 52-weeks. Unfortunately, VIX <15 here and underlyings -- whether exchange traded funds or individual underlyings -- with implied volatility both in the 52-week 70th percentile and above 50% implied volatility are absent here.
Consequently, I am "settling" for mere >50% implied volatility plays in exchange traded funds and in individual stocks. This isn't ideal, but I'm playing these small, keeping quite a bit of powder dry in the event that volatility does pick up at some point in the weeks ahead.
There are some opportunities out there, and they're where they've been for the past several weeks: in gold, miners, oil and gas, and biotech. The top IV individual stocks with liquid options are: NVAX (195.0) (biotech); RTRX (132.4) (biotech); GNW (100.3) (financial); WLL (80.5) (O&G); CLF (76.1) (iron ore/mining); AG (75.6) (silver miner); CHF (73.9) (oil and gas); AKS (70.0) (steel); EGO (62.7) (gold miner); VRX (61.9) (biotech); AMD (61.8) (semiconductor); and AUY (61.6) (gold miner). The top IV exchange traded funds are GDX (43.7) (gold miners); and XME (39.2) (mining).
And, because of the "smallness" of many of these underlyings (many are under $10), I'm taking a slightly different strategic tack here, either doing covered calls from the outset or selling puts as a precursor to a covered call, the notion being in the later case to either keep the premium or get put the stock at a lower price, after which I'll sell calls against. Things like short strangles and iron condors simply will not yield enough premium on setup to bother with in most of these smaller stocks.
In the one play that I currently have on in XME (see post below) that I could have strangled, I opted to just naked short put to leave open the option of covered calling it if I get put the stock or rolling the short put down and out for additional duration and credit should the underlying move that way rather than dealing with the hassles of call side risk. Naturally, these options would still be open to me were I to strangle, but doing just the short put relieves me of call side risk (there's always trade-offs).
For me personally, I'm looking to move into plays involving something other than gold, miners, or oil and gas, since I have quite a few of those on already. Unfortunately, this makes for pretty slim pickings in my little list, with the potential focus being on AMD and (ick) VRX. I'm already in NVAX and GNW, and I'm not fond of RTRX (it only offers monthlies and currently the Oct monthly expiry only offers 2 1/2 wide strikes; naturally, that may change ... ).
PREMIUM SELLING: TWLO OCT 21ST 45 SHORT PUTI generally don't like to ride broncos right out of the stall, but I might make an exception here ... .
This is because the Oct 21st 45 short put is currently bid 3.00, ask 3.80 (mid 3.40). That's $340 in premium for a one contract 58 and change underlying ... .
Alternatives:
Sept 16th 45 short put: bid .95, ask 1.11, mid 1.03.
Oct 21st 40 short put: bid 1.65, ask 2.10, mid 1.87.
I wouldn't be looking to acquire here, but rather to just squeeze some premium out and would look to take it off at 50% max profit. Broncos can make for an awfully rough ride ... . Ordinarily, I'd strangle this, but am hesitant to take on potential upside risk if this becomes a rocket sled sorta thang ... .
TRADE IDEA: GNW COVERED CALLMetrics:
Buy Shares at 4.62
Sell Oct 21st 5 call
Whole Package: 4.36
Max Profit: $64 (if called away at 5)
ROC: 14.7%
Notes: The ROC metrics are good here; the chart is not. The underlying is at highs, so it might be beneficial to wait for a pullback to initiate a play. By the same token, there is room to the upside (albeit small to next ZigZag indicated resistance at 5.16). I looked at premium on the put side; in my opinion, not enough juice there to sell, for example, the naked Oct 21st 4.
TRADE IDEA: RTRX COVERED CALLThis is a bit pricier than I'd like to go with a covered call, particular in biotech, which can implode on you dramatically if there is a clinical trial failure ... . Nevertheless, here's the metrics on this little fella:
Buy 100 Shares at 16.42
Sell Oct 21st 17.5 call
13.77 db at the mid
Max Profit: $373
ROC: 27.1%
Notes: There may be premium to be sold on the put side, but I'm looking at off hours quotes here, so it's hard to tell how wide the bid/ask on those will be during regular market hours ... .
TRADE IDEA: ARRY COVERED CALLMetrics:
Buy 100 Shares at 3.23
Sell Oct 21st 4 call
2.83 db at the mid (i.e., 2.83 is your cost basis in the shares)
Max Profit: $117 (if called away at 4)
ROC: 41% ROC
Notes: A good spot to initiate this here, given a bit of horizontal support.
SOLD TEVA SEPT 16TH 47.5 PUTSelling the 47.5 put naked here below support as a potential precursor to a covered call, which I got filled for a .73 ($73)/contract credit.
Basically, my thought process here is that I might want to covered call TEVA, but don't want to buy shares here at 53 (lower is better). I'll naturally watch price and roll the short put down and out for a credit should it appear that it's going to totally implode such that I could get the shares even cheaper. Otherwise, I'll just keep the credit collected for the short put here and/or cover in profit it if something better comes along.
BUYING POWER EFFICIENCY: "POOR MAN'S" VS. TRAD COVERED CALLSThere is more than one way to skin a cat. But some ways are more buying power efficient than others ... .
Here, I'm looking at a covered call in X. The implied volatility is >50%, so I can get a bit of premium on the call side to reduce my cost basis in any stock I buy here. For example, if I buy shares at 20.38, and sell the Sept 30th 20.5 call against (for a 1.50 ($150) credit at the mid), I can get into the whole package for a 19.03 debit ($1903), my cost basis in the shares will be $19.03 per share, and my max profit is $147 if called away at 23. However, for some, that $1903 stick price can be hefty, especially if they're working with a smaller account. The drawback is that I'm (a) stuck with stock I bought at 20.38 per share; and (b) the buying power effect may be larger than I'd like.
In comparison, I can also do a PWCC or poor man's covered call. Traditionally, this is set up using a long-dated, deep ITM long call option to stand in for the stock and -- like the covered call -- a call sold 30-45 DTE. Most of the time, I set these up using the 70 delta strike for the long option and the 30 delta strike for the short. As with the traditional covered call, I'm looking to reduce my cost basis in my "synthetic stock" (here, the long option) by selling calls against. Compared to the traditional covered call, the PWCC has a smaller price tag -- $361 (which is also my max loss for the setup, assuming I do nothing at all), and I look to exit the setup as a whole at 10-20% of what I paid for the setup which, in this case, isn't as attractive as the $147 max profit of the covered call. However, there is one other aspect of the setup worth noting -- my buying the Jan 20th 18 call gives me the right to exercise for shares at $18. With the covered call, I'm locked in with 20.38 shares; with the PWCC, I'm not.
COVERED CALL CANDIDATES: AMRN, ARRY, FOLDAMRN at 3.33/share; sell Sept 16th 3.5 call; 2.75 db; max profit $75 (21.4% ROC).
FOLD at 7.00/share; sell Sept 16th 7 call; 6.20 debit; max profit $80 (12.9% ROC).
ARRY at 4.54/share; sell Sept 16th 5 call; 4.19 db; max profit $81 (19.3% ROC).
Notes: Preliminary/off hours. I would also note I haven't looked at these guys' pipelines (they're all biotech) or done due diligence, which is why I'm just looking at them as "candidates" at the moment.
SOLD VRX SEPT 16TH 17.5 SHORT PUT... for a .91 ($91) credit ... .
Here are the metrics:
Probability of Profit: 76%
Max Profit: $91/contract
Max Loss/Buying Power Effect: Undefined/$175/contract
Break Even: 16.59
Notes: I'll look to take this off at 50% max profit. Not interested in being married to a position with this cluster of a company ... .
BOUGHT TO COVER GLD AUG 12TH 117/121 SHORT PUT VERTWith the short put wing of this Brexit wracked setup approaching worthless, I closed it today for a .04 ($4)/contract debit.
I then rolled the short call side out to the August 19th expiry to the 121/126 for a .50 ($50)/contract credit and (inadvertently) sold an overlapping short put spread against it for a .25 ($25)/contract credit. (This is what happens when you're busy and do stuff on the phone app ... ). Hopefully, price doesn't whip back into the put side, and I can fix the overlap with the next roll ... .
BOUGHT SPX JULY 22ND SPV TO CLOSE, ROLLED CALL SIDE FOR DURATION1. Closed the July 22nd 2020/2030 short put vertical for a .15 debit, as it's near worthless and done its job.
2. Rolled the July 22nd 2110/2120 call side out a week to the July 29th 2115/2125 and slight strike improvement for a .75 debit. The improvement isn't much, but I like to do these improvements small and over time until I get the required movement to exit the entire setup.
3. Sold the July 29th 2085/2095 short put vert to finance the call side roll for a 1.05 credit.
As with my NDX setup, what I need now is some movement back toward the call side to exit the entire setup at or above my "scratch point."
TRADE IDEA: FAS AUG 18TH 18/28.5 SHORT STRANGLETruth be told, I'm not a huge of fan of leveraged instruments, but when a $23 underlying has the potential to yield a $100 or more worth of credit, I'll briefly overlook the warts these instruments have as an "investment" tool ... .
Here are the metrics for the play:
Probability of Profit: 77%
P50: 81%
Max Profit: $127/contract at the mid (this is off hours pricing; we'll have to see whether that's possible at NY open)
Max Loss/Buying Power Effect: Undefined/$232/contract (estimated/off hours)
Break Evens: 16.73/29.77
Notes: I'll look to get a fill for anything north of $100/contract, given the price of the underlying. As usual, I'll look to take this off at 50% max profit.
KC shortUpdate on a upsloping trendline (blue) which acts as resistance
On the 5 hour chart, we should have generated a sell signal.
I still remain short via puyt spread 1x2s, as frost is no longer an issue. It appears the market is still digesting this from last week and should correct lower IMHO as physical supplies out of Brazil remain steady.
Warehouse stocks in EU and US plenty as well.
Dont get me wrong, as shown in the blue channel, even if we have a correction lower, the blue trend channel might indicate a change in trend, however the frost damage is simply not there and in order to rally, this market would need breaking news like that.... without anything of that sort coming out, I see a correction lower before making new highs.
Still, knowing coffee, I remain short with 1x2 calendar spreads, buying the downside 1 leg in one month and selling 2 lower puts in a month further back.
Binary Options Made Easy - GBPUSDWe look to place PUT or CALL Option at the confluence of Zones and Support & Resistance line for hourly expiry.
Binary Options Made Easy - EURUSD This is my method of trading Binary Options for the past 5 years trading only 30 minutes and hourly expiries. This method works 65 to 70% of the time and there are filters to further increase the winning %. We are not worried whether goes up or down. If it goes up, we SELL or place PUT options as it hits our SELL ZONES and buy areas where it drops and hits our BUY Zones.
As required with any form of trading, no strategy works all the time. Avoid over trading. Will observe how these zones marked plays out in the days ahead.
Money Management helps survive bad phases. Sticking to rules helps avoid emotional trading and maintain right psychology.
We are looking to place CALL or PUT options in the confluence area of Buy/Sell Zones in confluence with Support and Resistance on hourly candles with 30 minutes / 60 minutes expiries.
Will post results of the trades taken based on the areas marked.
Binary Options Made Easy - Trading Opportunities on USDJPYThis is my method of trading Binary Options for the past 5 years trading only 30 minutes and hourly expiries. This method works 65 to 70% of the time and there are filters to further increase the winning %. We are not worried whether goes up or down. If it goes up, we SELL or place PUT options as it hits our SELL ZONES and buy areas where it drops and hits our BUY Zones. As required with any form of trading, no strategy works all the time. Avoid over trading. Will observe how these zones marked plays out in the days ahead. Money Management helps survive bad phases. Sticking to rules helps avoid emotional trading and maintain right psychology.
We are looking to place CALL or PUT options in the confluence area of Buy/Sell Zones in confluence with Support and Resistance on hourly candles with 30 minutes / 60 minutes expiries.
Will post results of the trades taken based on the areas marked.
ROLLING SPY JUN 10TH 209/213 SCV TO JUNE 24TH 210/214 SCVRolling my SPY June 10th 209/213 short call vertical out a couple of weeks and up a strike for a little more time and a smidgeon of strike improvement (again ... ).
I got this filled for a $22/contract debit and then sold a 199/203 short put vertical in the same expiration for a $41/contract credit, so I'm net credit on the operation, so I've now got a SPY June 24th 199/203/210/214 iron condor in that expiry.
While I plan on continuing to roll the short call side up and out, if necessary, I'm naturally looking for price to stay between my 203 short put strike and my 210 short call strike toward expiry to exit the trade profitably.
SOLD JUNE 24TH SPX 2020/2030/2145/2155 IRON CONDORKeeping with the short term engagement trade theme here while I wait for some volatility to sell premium in something ... anything ... (currently, there is no fairly liquid underlying with an implied volatility rank of greater than 70 to work).
Metrics:
Probability of Profit: 58%
P50: 77%
Max Profit: $310/contract
Max Loss/Buying Power Effect: $690/contract
Theta: 8.99/contract
Delta: -3.62/contract
Notes: I'll look to take this off at 50% max profit or earlier if something pops to the forefront with decent volatility ... .
TRADE IDEA: IWM JULY 1ST 100/103/114/117 IRON CONDORLayering on a bit more bread on my butter while VIX>15 ... . This is about as full a boat as I like to have (not <25% in cash), so I may not be posting many new trade ideas here for a bit; most of them will be closing trades. I know ... boring ... .
Metrics:
Probability of Profit: 58%
P50: 65%
Max Profit: $102/contract
Max Loss/Buying Power Effect: $198/contract
Theta: 1.56/contract
Delta: -4.62/contract
Notes: You know the drill ... . Look to take this off at 50% max profit ... .
TRADE IDEA: GDX JUNE 17TH 20/27 SHORT STRANGLEGoing where the premium is at ... . I already have a setup in GDX in the same expiry, so I'm layering another on small here ... .
Metrics:
Probability of Profit: 69%
P50: 81%
Max Profit: $93/contract
Max Loss/Buying Power Effect: Undefined/~$236/contract
Delta: =8.29/contract
Theta: 2.98/contract
