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PM Philip Morris International Options Ahead of EarningsIf you haven`t sold PM before the previous earnings: Now analyzing the options chain and the chart patterns of PM Philip Morris International prior to the earnings report this week, I would consider purchasing the 109usd strike price Calls with an expiration date of 2024-7-26, for a premium of approximately $1.22. If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
NYSE:PMLong
by TopgOptions
Options Blueprint Series: Bear Put Diagonal Fly on Euro FuturesIntroduction Euro FX EUR/USD Futures are a key instrument in the futures market, allowing traders to speculate on the future value of the Euro against the US Dollar. Trading Euro FX EUR/USD Futures provides exposure to the currency markets, enabling traders to hedge risk or capitalize on market movements. Key Contract Specifications: Contract Size: 125,000€ Tick Size: 0.00005 Tick Value: $6.25 Margin Requirements: Approximately $2,100 (varies by broker and market conditions and changes through time) These contract specs are crucial for understanding the potential profit and loss scenarios when trading Euro Futures. The tick size and value help determine the smallest price movement and its monetary impact, while the margins indicate the amount of capital required to initiate a position. Strategy Explanation The Bear Put Diagonal Fly is an advanced options strategy designed to profit from a bearish market outlook. This strategy involves buying and selling put options with different expiration dates and strike prices, creating a diagonal spread. Bear Put Diagonal Fly Breakdown: Buy 1 Put (longer-term expiration): This long put provides downside protection over a longer period, benefiting from a significant decline in the underlying asset. Sell 1 Put (intermediate-term expiration): This short put helps to offset the cost of the long put, generating premium income and partially financing the trade. Buy 1 Put (shorter-term expiration): This additional long put offers further downside protection, particularly for a shorter duration, enhancing the overall bearish exposure. Purpose of the Strategy: The Bear Put Diagonal Fly is structured to take advantage of a declining market with specific price movements over different time frames. The staggered expiration dates allow the trader to benefit from time decay and volatility changes. Advantages: Cost Reduction: The premium received from selling the put helps to reduce the overall cost. Enhanced Bearish Exposure: The additional shorter-term put provides extra exposure. Flexibility: The strategy can be adjusted or rolled over as market conditions change. Potential Risks: Time Decay: If the market does not move as expected, the long puts may lose value due to time decay. Volatility Risk: Changes in market volatility can impact the value of the options. Application on Euro Futures To apply the Bear Put Diagonal Fly strategy on Euro Futures, careful selection of strike prices and expiration dates is crucial. This strategy involves three options positions with different expirations to optimize the potential profit from a bearish market move. Selecting Strike Prices and Expiration Dates: Long Put (longer term): Choose a strike price above the current market price of Euro Futures to benefit from a significant decline. Short Put (intermediate term): Select a strike price closer to the market price to maximize premium income while reducing the overall cost of the strategy. Long Put (shorter term): Pick a strike price below the market price to provide additional bearish exposure. Why This Strategy is Suitable for Euro Futures: Market Conditions: As seen on the upper chart, the current market outlook for the Euro suggests potential downside due to technical factors, making a bearish strategy appropriate. Volatility: Euro Futures often experience significant price movements, which can be advantageous for the Bear Put Diagonal Fly strategy, as it thrives on volatility. Flexibility: The staggered expiration dates allow for adjustments and management of the trade over time, accommodating changing market conditions. Futures (underlying using the 6E1! continuous ticker symbol) Entry, Target, and Stop-Loss Prices: Short Entry: 1.09000 Target: 1.08200 Stop-Loss: 1.09400 Options Trade Setup (using Futures September cycle with 6EU2024 ticker symbol): The Bear Put Diagonal Fly on Euro Futures involves a structured approach to setting up the trade. Here’s a step-by-step guide to executing this strategy: 1. Buy 1 Put (Sep-6 expiration): Strike Price: 1.095 Premium Paid: 0.0102 (or $1,275 per contract) 2. Sell 1 Put (Aug-23 expiration): Strike Price: 1.09 Premium Received: 0.0061 (or $762.5 per contract) 3. Buy 1 Put (Aug-9 expiration): Strike Price: 1.085 Premium Paid: 0.0021 (or $262.5 per contract) Risk Calculation: Net Cost = ($1,275 + $262.5) - $762.5 = $775 Risk: The initial net cost of the strategy. Risk = $775 Trade and Risk Management Effective risk management is essential when trading options strategies like the Bear Put Diagonal Fly on Euro Futures. Effectively managing the Bear Put Diagonal Fly on Euro Futures is crucial to optimize potential profits and mitigate risks. Here are common guidelines for managing this options strategy: Using Stop-Loss Orders: In the Bear Put Diagonal Fly strategy, setting a stop-loss at 1.0940 ensures that if Euro Futures move against the expected direction, the losses are contained. Avoiding Undefined Risk Exposure: The Bear Put Diagonal Fly is a defined risk strategy, meaning the maximum loss is known upfront and limited to the initial net cost. Precise Entries and Exits: Timing the Market: Entering and exiting trades at the right time is crucial. Using technical analysis tools such as UFO Support or Resistance levels can help identify optimal entry and exit points. Monitor Time Decay: Keep a close eye on how the time decay (theta) impacts the value of the options. As the short put approaches expiration, assess whether to roll it to a later date or let it expire. Volatility Changes: Changes in market volatility can affect the strategy’s profitability. Rolling Options: If the market moves unfavorably, rolling the options to different strike prices or expiration dates can help manage risk and maintain the strategy’s viability. Regular Check-ins: Review the position regularly to ensure it aligns with the expected market movement. Adjust if the market conditions change or if the position starts to deviate from the initial plan. Profit Targets: Set predefined profit targets and consider taking profits when these targets are reached. Exit Strategies: Have a clear exit plan for different scenarios, at least for when the stop-loss or target is hit. By implementing robust risk management practices, traders can enhance their ability to manage potential losses and improve the overall effectiveness of their trading strategies. Managing the Bear Put Diagonal Fly requires active monitoring and the flexibility to adjust the positions as market conditions evolve. This proactive approach helps in maximizing potential returns while mitigating risks. Conclusion The Bear Put Diagonal Fly is an advanced options strategy tailored for a bearish outlook on Euro Futures. By strategically selecting options with different expiration dates and strike prices, this strategy offers a cost-effective way to capitalize on anticipated declines in the Euro while managing risk. Summary of the Bear Put Diagonal Fly Strategy: Cost Reduction: The short put helps to offset the cost of the long puts, making the strategy more affordable. Enhanced Bearish Exposure: The additional long put provides extra downside protection. Flexibility: The staggered expiration dates allow for adjustments and trade management over time. Why This Strategy Could Be Beneficial: The current market conditions suggest potential downside for Euro Futures, making a bearish strategy like the Bear Put Diagonal Fly appropriate. The defined risk nature of the strategy ensures that maximum potential losses are known upfront. Effective trade and risk management techniques can further enhance the strategy’s performance and mitigate potential risks. By understanding the mechanics of the Bear Put Diagonal Fly and applying it to Euro Futures, traders can leverage this advanced options strategy to navigate bearish market conditions with greater confidence and precision. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CME:6E1!Education
by traddictiv
QQQ Intraday $100 to $2500 with options RECAPQQQ is shown here on the 15 minute time frame. Overlaid are a HMA 7 and SMA 5 to provide moving average crosses. QQQ made a "M" pattern. Options charts are shown in the updates. First Trade SQQQ is opened at 9:48 for $ 6.00 per call contract times 16 contracts. It is closed at 10:05 less than 20 minutes later at $20.00 per contract. $96 dollars the only risk in the trade is waiting to settle as is the $ 224.00 in profit. ( This is a same day expiration intraday trade) Second Trade QQQ as QQQ has topped and is pivoting down. The second trade of the day is not a same day expiration as it is now Friday afternoon, a put option in the direction of the trend is taken for Tuesday the 20th, there being no puts for the Monday holiday. The floating profit is $ 224 and the strike is set for below the money in the current direction of the trend. A strike of $ 429 selected. The options chart is shown in the updates. The premium was 0.37 so $37 per contract so six contracts were taken for a total of which is $222 or slightly less than the profit on the first trade. The trade is taken at 14:47 market time and closed about 90 minutes later at 15:52 before the close. The contracts sold at close for $ 1.41 each yielding $ 141 per contract or $ 2256 overall. Between the two trades $100 was risked and $ 233 + 2256 or 2489 overall. The Reward to Risk ratio was about 25. The profit and the initial $100 into the trades awaits settlement after the holiday. This trade was made to teach a mentee about the power of options leveraged with narrow expirations to optimize profits and not spend a lot of time in the trade to minimize risk in the market from any number of potentials. Alerts and notifications centered on moving averages and rise or fall of intraday low time frame relative strength are used to lessen screen time. Twenty baggers may not be everyday but then again with practice and patience they can come along often enough.
NASDAQ:QQQ
by AwesomeAvani
JPM JPMorgan Chase & Co Options Ahead of EarningsIf you haven`t bought the dip on JPM: Now analyzing the options chain and the chart patterns of JPM JPMorgan Chase & Co prior to the earnings report this week, I would consider purchasing the 200usd strike price in the money in the money Calls with an expiration date of 2025-1-17, for a premium of approximately $17.25. If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
NYSE:JPMLong
by TopgOptions
WAL Western Alliance Bancorporation Options Ahead of EarningsIf you haven`t bought the start of the reversal on WAL: Now analyzing the options chain and the chart patterns of WAL Western Alliance Bancorporation prior to the earnings report this week, I would consider purchasing the 65usd strike price Puts with an expiration date of 2024-9-20, for a premium of approximately $1.60. If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
NYSE:WALShort
by TopgOptions
Exploring Bullish Plays with E-minis, Micro E-minis and OptionsIntroduction The S&P 500 futures market offers a variety of ways for traders to capitalize on bullish market conditions. This article explores several strategies using E-mini and Micro E-mini futures contracts as well as options on futures. Whether you are looking to trade outright futures contracts, create sophisticated spreads, or leverage options strategies, this guide will help you design effective bullish plays while managing your risk. Choosing the Right Contract Size When considering a bullish play on the S&P 500 futures, the first decision is choosing the appropriate contract size. The E-mini and Micro E-mini futures contracts offer different levels of exposure and risk. E-mini S&P 500 Futures: Standardized contracts linked to the S&P 500 index with a point value = $50 per point. Suitable for traders seeking significant exposure to market movements. Greater potential for profits but also higher risk due to larger contract size. TradingView ticker symbol is ES1! Margin Requirements: As of the current date, the margin requirement for E-mini S&P 500 futures is approximately $12,400 per contract. Margin requirements are subject to change and may vary based on the broker and market conditions. Micro E-mini S&P 500 Futures: Contracts representing one-tenth the value of the standard E-mini S&P 500 futures. Each point move in the Micro E-mini S&P 500 futures equals $5. Ideal for traders who prefer lower exposure and risk. Allows for more precise risk management and position sizing. TradingView ticker symbol is MES1! Margin Requirements: As of the current date, the margin requirement for Micro E-mini S&P 500 futures is approximately $1,240 per contract. Margin requirements are subject to change and may vary based on the broker and market conditions. Choosing between E-mini and Micro E-mini futures depends on your risk tolerance, account size, and trading strategy. Smaller contracts like the Micro E-minis provide flexibility, especially for newer traders or those with smaller accounts. Bullish Futures Strategies Outright Futures Contracts: Buying E-mini or Micro E-mini futures outright is a straightforward way to express a bullish view on the S&P 500. This strategy involves purchasing a futures contract in anticipation of a rise in the index. Benefits: Direct exposure to market movements. Simple execution and understanding. Ability to leverage positions due to the margin requirements. Risks: Potential for significant losses if the market moves against your position. Requires substantial margin and capital. Mark-to-market losses can trigger margin calls. Example Trade: Buy one E-mini S&P 500 futures contract at 5,588.00. Target price: 5,645.00. Stop-loss price: 5,570.00. This trade aims to profit from a 57-point rise in the S&P 500, with a risk of a 18-point drop. Futures Spreads: 1. Calendar Spreads: A calendar spread, also known as a time spread, involves buying (or selling) a longer-term futures contract and selling (or buying) a shorter-term futures contract with the same underlying asset. This strategy profits from the difference in price movements between the two contracts. Benefits: Reduced risk compared to outright futures positions. Potential to profit from changes in the futures curve. Risks: Limited profit potential compared to outright positions. Changes in contango could hurt the position. Example Trade: Buy a December E-mini S&P 500 futures contract. Sell a September E-mini S&P 500 futures contract. Target spread: Increase in the difference between the two contract prices. In this example, the trader expects the December contract to gain more value relative to the September contract over time. The profit is made if the spread between the December and September contracts widens. 2. Butterfly Spreads: A butterfly spread involves a combination of long and short futures positions at different expiration dates. This strategy profits from minimal price movement around a central expiration date. It is constructed by buying (or selling) a futures contract, selling (or buying) two futures contracts at a nearer expiration date, and buying (or selling) another futures contract at an even nearer expiration date. Benefits: Reduced risk compared to outright futures positions. Profits from stable prices around the middle expiration date. Risks: Limited profit potential compared to other spread strategies or outright positions. Changes in contango could hurt the position. Example Trade: Buy one December E-mini S&P 500 futures contract. Sell two September E-mini S&P 500 futures contracts. Buy one June E-mini S&P 500 futures contract. In this example, the trader expects the S&P 500 index to remain relatively stable. Bullish Options Strategies 1. Long Calls: Buying call options on S&P 500 futures is a classic bullish strategy. It allows traders to benefit from upward price movements while limiting potential losses to the premium paid for the options. Benefits: Limited risk to the premium paid. Potential for significant profit if the underlying futures contract price rises. Leverage, allowing control of a large position with a relatively small investment. Risks: The potential loss of the entire premium if the market does not move as expected. Time decay, where the value of the option decreases as the expiration date approaches. Example Trade: Buy one call option on E-mini S&P 500 futures with a strike price of 5,500, expiring in 73 days. Target price: 5,645.00. Stop-loss: Premium paid (e.g., 213.83 points x $50 per contract). If the S&P 500 futures price rises above 5,500, the call option gains value, and the trader can sell it for a profit. If the price stays below 5,500, the trader loses only the premium paid. 2. Synthetic Long: Creating a synthetic long involves buying a call option and selling a put option at the same strike price and expiration. This strategy mimics owning the underlying futures contract. Benefits: Similar profit potential to owning the futures contract. Flexibility in managing risk and adjusting positions. Risks: Potential for unlimited losses if the market moves significantly against the position. Requires margin to sell the put option. Example Trade: Buy one call option on E-mini S&P 500 futures at 5,500, expiring in 73 days. Sell one put option on E-mini S&P 500 futures at 5,500, expiring in 73 days. Target price: 5,645.00. The profit and loss (PnL) profile of the synthetic long position would be the same as owning the outright futures contract. If the price rises, the position gains value dollar-for-dollar with the underlying futures contract. If the price falls, the position loses value in the same manner. 3. Bullish Options Spreads: Options are incredibly versatile and adaptable, allowing traders to design a wide range of bullish spread strategies. These strategies can be tailored to specific market conditions, risk tolerances, and trading goals. Here are some popular bullish options spreads: Vertical Call Spreads Bull Call Spreads Call Debit Spreads Ratio Call Spreads Diagonal Call Spreads Calendar Call Spreads Bullish Butterfly Spreads Bullish Condor Spreads Etc. The following Risk Profile Graph represents a Bull Call Spread made of buying the 5,500 call and selling the 5,700 call with 73 to expiration: For detailed explanations and examples of these and other bullish options spread strategies, please refer to the many published ideas under the "Options Blueprint Series." These resources provide in-depth analysis and step-by-step guidance. Trading Plan A well-defined trading plan is crucial for successful execution of any bullish strategy. Here’s a step-by-step guide to formulating your plan: 1.Select the Strategy: Choose between outright futures contracts, calendar or butterfly spreads, or options strategies based on your market outlook and risk tolerance. 2. Determine Entry and Exit Points: Entry price: Define the price level at which you will enter the trade (breakout, UFO support, indicators convergence/divergence, etc.) Target price: Set a realistic target based on technical analysis or market projections. Stop-loss price: Establish a stop-loss level to manage risk and limit potential losses. 3. Position Sizing: Calculate the appropriate position size based on your account size and risk tolerance. Ensure that the position aligns with your overall portfolio strategy. 4. Risk Management: Implement risk management techniques such as using stop-loss orders, hedging, and diversifying positions to protect your capital. Risk management is vital in trading to protect your capital and ensure long-term success Conclusion and Preview for Next Article In this article, we've explored various bullish strategies using E-mini and Micro E-mini S&P 500 futures as well as options on futures. From outright futures contracts to sophisticated spreads and options strategies, traders have multiple tools to capitalize on bullish market conditions while managing their risk effectively. Stay tuned for our next article, where we will delve into bearish plays using similar instruments to navigate downward market conditions. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CME_MINI:ES1!Education
by traddictiv
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