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Shortput

Rolling (IRA): QQQ June 30th 288 to July 23rd 305 Short Put... for a 2.22 credit. Comments: Total credits collected of 3.10 (See Post Below) + 2.22 = 5.32 versus a short put value of 2.32 = a realized gain of 3.00 so far. Previously, I rolled down and out as a "window dressing" roll, but like the idea of being in all three majors (SPY, IWM, and QQQ) to take advantage of some rotational stuff going on, so decided to stay in the play and roll out. Naturally, rolling on a red day or a series of red days would have been more ideal ... .
NASDAQ:QQQ
by NaughtyPines
Rolling (IRA): IWM June 25th 202.5 Short Put to July 23rd 205... for a 1.69 credit. Comments: Was hoping for a red day here after yesterday's price action, but can't have everything. In any event: with only .58 or so left in the 202.5, rolling out to the July 23rd 16 delta strike at the 205 for a 1.69 credit in lieu of adding units. Total credits collected of 4.12 (See Post Below) + 1.69 or 5.81 versus the 205's current value of around 2.30, so I've realized a gain of 3.50 or so far.
AMEX:IWM
by NaughtyPines
The Week Ahead: ARKK, ARKG, GDXJ, MJ, XBI, XLE, X, CLF, SAVE, FHere's where the premium was at as of Friday's close: Broad Market Exchange-Traded Funds With 30-Day Implied >20%: IWM (1/23) Comments: I have quite a bit of IWM on here, but my order of preference is broad market, then sector, then single name, so am comfortable with adding if we get both weakness and a pop in volatility. IWM/RUT has been fairly rangebound, so it's worthwhile to pop open a chart and see where the bottom of the range is and where any puts you sell are relative to the range between 210 and 235. Sector Exchange-Traded Funds With 30-Day Implied > 35%: ARKK (31/45) ARKG (18/41) GDXJ (0/40) MJ (7/40) XBI (12/38) XLE (2/36) Comments: I've got ARKK, ARKG, and MJ July monthlies on, so I may look to add some GDXJ, even though its implied volatility is literally at the bottom of the 52-week range (which is still afflicted by the 2020 pandemic range, so implied volatility rank/percentile aren't all that helpful here), and it isn't exactly weak relative to where it's been. MJ and XBI are currently the most weak out of the group, so I'm personally leaning toward putting on some more XBI, having taken have a June trade last week. Single Name With 30-Day >50% That Do Not Have Earnings Before Contract Expiry: X (Steel) (9/74) CLF (Basic Materials) (18/73) SAVE (Airlines) (2/55) F (Autos) (19/55) OXY (Oil and Gas) (8/53) SABR (Airlines; Technology) (25/51) MRO (Oil and Gas) (0/50) Comments: Given the slim pickings in the broad market and exchange-traded funds space, I've made a list of options highly liquid single name to potentially play while I wait for broad market or sector volatility to return. This list isn't exhaustive, and I've culled out a ton of meme names that have juicy implied volatility but are more likely to become a headache because they're (ironically) too volatile or they're in a space where they're more likely to blow up in my face (e.g., biopharma research and development, crypto). Pictured here is an X July 16th 22 Short Put (20 delta), paying .74/contract as of Friday close, 3.48% ROC at max/27.6% annualized. As you can see, that play is somewhat close to price action of late, so I'd only put that play on if you're comfortable with potentially taking assignment at 22 and then wheeling it from there. Alternatively, opt for a setup that is consistent with any directional assumption you have as to where U.S. Steel goes from here and that takes advantage of the high implied here.
NYSE:X
by NaughtyPines
Rolling (IRA): SPY July 16th 367 to August 20th 378... for a 2.56 credit. Comments: With the July 16th 367 at greater than 50% max, rolling it to the next monthly strike paying at least 1% of the strike price in credit. So far, I've collected 8.75 + 2.56 in credits or 11.31 ($1131) of which 7.39 ($739) is realized gain. It would be better to roll this on a red day or when implied volatility is better, but the goal here is to stay mechanical, rather than trying to collect "ideal" premium each and every roll.
AMEX:SPY
by NaughtyPines
Rolling (IRA): QQQ June 25th 300 Short Put to July 2nd 294... for a .04 credit. Comments: Here, a take profit/window dressing roll. Put on for 3.01 (See Post Below), it's at greater than 50% max here. I want to take profit, but reduce risk by rolling the strike a little bit further away from current price, as well as milk the remaining premium out of the play without extending duration a ton. With the July 2nd 294 worth only 1.42 here, I've realized a gain of 3.01 - 1.42 or 1.59 ($159).
NASDAQ:QQQ
by NaughtyPines
Rolling (IRA): QQQ June 18th 297 Short Put to June 30th 288... for an .11 credit. Comments: Here, doing a little "window dressing" rolling ... . With the 297 at greater than 50% max (See Post Below), rolling it down and out in duration a little bit for a realized gain and a small credit. Here, I just want to take profit up to this point and reduce risk (since the 288 is farther away from current price than the 297, but also milk the remaining risk premium out of the play. Total credits collected of 2.99 + .11 = 3.10 versus the June 30th 288 current short put value of 1.46, so I've realized a profit of 3.10 - 1.46 or 1.64 ($164) so far.
NASDAQ:QQQ
by NaughtyPines
Trade Idea: RIOT June 18th 17 or August 20th 15 Short PutRIOT announces earnings on Monday, so I'm not keen on stepping in front of what is likely to be a moving bus. However, I may consider something post-earnings and wanted to price things out here ahead of time to give me some idea as to where I might want to set up up my tent and what that might be paying. Unfortunately, the weeklies aren't that great for liquidity, and there's no July monthly at the moment, so would either have to trade June (33 days) or August (96 days). So, like, which one? June implied is at a whopping 185.3% (no doubt due to earnings); August at 120.7%. The June 18th 14 delta 17 strike is paying 1.23 at the mid, 7.8% ROC at max, 86.3% annualized; the August 20th 13 delta 15, 1.88, 14.3% at max, 54.4% annualized. I'm using the same approximate delta for both expiries to kind of compare "apples to apples." Naturally, there are trade-off's. The shorter duration, similarly delta'd June 17 pays more on an annualized basis, but it's closer to at the money. Conversely, the August 20th 15 pays less on an annualized basis, but is farther away from current price, so gives you more room to be wrong, as well as more premium to potentially take off at 50% max -- 50% max of 1.23 is .61; 50% max of 1.88 is .94. Additionally, the August setup has a smaller buying power effect versus the June: 13.12 versus June's 15.77 (cash secured). On margin, the difference will be smaller with a buying power effect for the 17 being around 3.40; the 15, 3.00 even. For me, it boils down to answering the question: "Am I comfortable with acquiring it at 17 or more comfortable at acquiring it at 15?" To me, the answer is "lower," and so am mostly likely to go with the August setup. Naturally, this will all be moot if it takes off like a rocket post-earnings, in which case I won't put on a trade.
NASDAQ:RIOTLong
by NaughtyPines
The Week Ahead: ARKG, ARKK, MJ, ARKQ, GDXJ, IWM/RUT PremiumHere's what's paying for premium sellers as of Friday's close ... . For those of you not familiar with my general process, my general order of preference is to trade (a) broad market; (b) sector exchange-traded funds; and (c) single name, in that order. If broad market isn't paying, I look at exchange-traded funds, and -- if those aren't paying -- I look at single name. This week, I think that there are opportunities to sell premium in at least sector exchange-traded funds, so I don't feel the need to delve into what single name is paying and haven't bothered to screen single name here. In any event, I first screen out exchange-traded funds* that do not have a 30-day implied volatility of at least 35%. Then, I price out what the 45 day at-the-money short straddle is paying as a function of strike price with the notion being that if the short straddle is paying, then most other premium selling setups I undertake will also be paying, whether it be short puts, short strangles, iron condors/flies, or short verticals/credit spreads. Here, my cut-off is generally a risk premium (credit received)/short straddle ratio of greater than 10%. In light of this, I probably wouldn't bother playing FXI here, even though it has a 30-day implied of 36% and one that is relatively high in the range (at the 63rd percentile) because it just isn't paying enough -- 6.18% as a function of strike price. In comparison, it looks like "The Ark Complex" is paying, even though some expiry availability/liquidity makes the exchange-traded funds in this grouping less than ideal to trade. Exchange-Traded Funds Screened for Options Liquidity and 30-Day Implied >35%: ARKG (Genomics) (60 rank/61 30-Day): June 18th (33 Days)** 77 short straddle, 9.20 at the mid price, 11.95% as a function of strike price, 132.2% annualized. ARKK (Innovation) (52/54): July 2nd (47 Days) 104.5 short straddle, 14.45 at the mid, 13.83% as a function of strike price, 107.4% annualized. MJ (Cannabis) (<1/42): July 2nd (47 Days) 19.5 short straddle, 2.60 at the mid, 13.33% as a function of strike price, 103.5% annualized. ARKQ (Robotics) (51/39): June 18th (33 Days)*** 79.34 short straddle, 6.75 at the mid, 8.51% as a function of strike price, 94.1% annualized. GDXJ (Junior Gold Miners) (7/37): July 2nd (47 Days) 51 short straddle, 5.58 at the mid, 10.94% as a function of strike price, 85.0% annualized. XME (Metals and Mining) (34/37): July 2nd (47 Days) 45 short straddle, 5.95 at the mid, 13.22% as a function of strike price, 102.7% annualized. EWZ (Brazil) (14/37): July 2nd (47 Days) 37 short straddle, 3.50 at the mid, 9.56% as a function of strike price, 74.2% annualized. FXI (China) (63/36): July 2nd (47 Days) 44 short straddle, 2.72 at the mid, 6.18% as a function of strike price, 48.0% annualized. GDX (Gold Miners) (30/35): July 2nd (47 Days) 38 short straddle, 3.53 at the mid, 9.29% as a function of strike price, 72.1% annualized. Broad Market Exchange-Traded Funds with 30-Day >20%: IWM (Russell 2000) (16/27): July 2nd (47 Days) 221 short straddle, 15.68 at the mid, 7.10% as a function of strike price, 55.1% annualized. QQQ (Nasdaq) (14/24): July 2nd (47 Days) 326 short straddle, 21.18 at the mid, 6.50% as a function of strike price, 50.5% annualized. * -- For single name, the cut-off is 50% implied or greater; for broad market, 20% or greater. Broad market just tends to be less volatile than sector, which -- in turn -- tends to be less volatile than single name. ** -- There is currently no weekly contract near 45 days' duration, so using the monthly here. *** -- As with ARKG, there is currently no weekly contract near 45 days, so using the June monthly here.
AMEX:ARKK
by NaughtyPines
Rolling (IRA): IWM May 28th 200 Short Put to June 30th 200... for a 1.64 credit. Notes: With only .48 or so of extrinsic left in it, rolling out the May 28th 200 (See Post Below) to the June 30th 200 (51 days, 16 delta) for a 1.65 credit and a realized gain on this little bit of weakness here. Total credits collected of 3.79 versus a current contract value for the June 30th 200 of 2.16, so I've realized profits of 3.79 minus 2.16 or 1.63 ($163) in this puppy so far. It also happens to be the last May contract I had on, so it doubles as a little bit of a "housekeeping" trade.
AMEX:IWM
by NaughtyPines