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Volatilitycontraction

DLTR - Dollar Tree, Inc.Bought position as the stock came thru the high-volume pivot from Dec 10. The stock has been one of the strongest in the market, gapping up and out of a very long-term base on an analyst upgrade in November and having a very strong day on earnings. Since earnings, it has digested its move very orderly and with very low volatility. It looks like it may be ready to attempt another leg higher, but since this name does not have the strong earnings numbers I usually look for, I will be aggressive with profit taking.
NASDAQ:DLTRLong
by apaqu
How I Captured A 100% Move In BalaminesFirst Thing You Need to Know Here Is That All The Strategies in the world are only successful if you can exercise the patience required. Sitting Tight Is the most important skill not reading charts. I Went Long In Balamines on 26th October 2020 Basis A Weekly Inside Bar Breakout. The Stock Was In A Strong Uptrend Before This And Had Taken A Pause Between August to October. The Movements Became Tighter & Smaller with each passing week and that is when it started showing up on my radar. I took my first long when the high of 19th October candlestick was breached, The Stock did nothing for a week post my buy ( sitting tight is important through these phases ), Exploded Post this and reached a high on 1054 in November but reversed from there again. It was waiting time again, I waited for a month and the movements started becoming tighter again in the week starting on 28th December, I went long again when the high of this candle was breached at 950. The stock flew next week making a monster move of 22% in one week. After another month of waiting in Feb came another monster move of 35% in one week. By First Week Of March the stock reached a price of 1905, A 114% Move over my average price. I am Still Holding the stock. The Moves Came Coz I sat through the dull phases not because I have a special skill in reading charts. Hope This Helps You in improving your performance. Always Trade On A predefined risk.
NSE:BALAMINESLong
by mohit_nischal
GM General Motors Company is engaged in the designing, manufacturing and retailing of vehicles globally including passenger cars, crossover vehicles, and light trucks, sport utility vehicles, vans and other vehicles. 1-Year Return 10.76% 3-Year Return -6.13% 5-Year Return 13.35% 5-Year Revenue Growth -11.99% 5-Year Earnings Growth 58.03% 5-Year Dividend Growth 26.67% It looks like volatility is contracting. Will be very interesting to see what happens with the autonomous driving. I still think TSLA will be the winner in this space. abcnews.go.com
NYSE:GMLong
by Tea-Trades
CRWD impending breakoutAfter just having a failed retest at the top resistance line of the channel (which could have been a support line), CRWD is now hitting the roof of the channel again. The RSI is being tightly wedged between two trendlines; volatility is also contracting. From what I can tell there is high chance of breakout on this stock. If I wanted a short term trade with a good chance of carrying out, I would wait for a breakout. This will be signaled by a big jump in volume on an up day. If the price hits the open of September 1st (above the 132 level) I would consider taking a short term position and taking profits if the price hits the close of September 2nd (142.50 level). We could also see a failed retest so I would set a stop loss around the current price, the 130 level.
NASDAQ:CRWDLong
by Isaiahgr3
2
THE WEEK AHEAD: SNAP, TWTR VOL CONTRACTION PLAYS; GDXJEARNINGS: Bunch of options liquid underlyings announcing earnings this week: IBM (27/36/<10%), Monday, After Market Close SNAP (43/79/18.1%): Tuesday, After Market Close MSFT (29/38/<10%): Wednesday, After Market Close TWTR (44/69/15.8%): Thursday, Before Market Open INTC (24/39/<10%): Thursday, After Market Close AMZN (70/55/12.5%) (Thursday, After Market Close) and TSLA (48/109/25.4%) (Wednesday, After Market Close) also announce, but options aren't the most liquid here, even though it's tempting to play all that juice in TSLA, with 30-day at 109% and the August 21st at-the-money short straddle paying a 25.4% of the stock price (which has gone parabolic). From a buck banging standpoint, SNAP and TWTR look to be the potentially most productive for pure volatility contraction plays. Pictured here is an August 21st 20/29 directionally neutral short strangle, which was paying 1.39 as of Friday close. For those of a defined risk bent, consider something akin to the 18/21/28/31, which was paying slightly greater than one-third the width of the wings at 1.10 or a similar setup. The TWTR August 21st 31/41 was paying 2.06 with a one-third-the-wing-width setup preliminarily being something like the 29/32/40/43, paying 1.21. Naturally, strikes may have to be adjusted, depending how the underlyings move running into earnings. EXCHANGE TRADED FUNDS ORDERED BY RANK AND SCREENED FOR 30-DAY >35% AND AT-THE-MONEY SHORT STRADDLE PRICE >10% OF STOCK PRICE: XLE (28/44/10.3%) GDXJ (23/55/12.0%) EWZ (17/44/10.3%) XOP (15/56/10.2%) Relative to the past few weeks, volatility has dried up here quite a bit. The August monthly has 33 days left in it, so part of the "not paying" part has to do with duration. My tendency here would be to hold off, waiting until September duration (61 days) comes into range; it's still a little bit lengthy if you want to stick to stuff in that 45 day give-or-take wheelhouse. BROAD MARKET: Only IWM (33/37/8.3%) currently has a 30-day in excess of 35%, and that ain't saying much, with the at-the-money short straddle paying less than 10% of the value of the underlying. IRA SHOPPING LIST/DIVIDEND YIELDERS: Only EWZ (17/44/10.3%) has a 30-day >35%, along with the August at-the-money short straddle paying >10% of the stock price metric. I've already got a small short put ladder stuck out there (See Post Below), but aren't very tempted to add with the implied being so low within the 52-week range -- in the 17% percentile.
NYSE:SNAP
by NaughtyPines
4
ZECBTC | APEX | Symmetrical Triangle | Volatility Contraction Todays Analysis- ZECBTC – trading within a symmetrical triangle as it nears the apex. Points to consider: - Volatility Contracting (apex) - Consolidating above range median - 100 EMA (dynamic Resistance) - Declining Volume - RSI above 50 - Stochastics overextended As ZECBTC consolidates above range median, volatility is contracting as price coils into its apex where a break in either direction is probable. Historically, price has failed to break above the 100 EMA, thus another rejection upon re-test is probable. However, body candle closes/consolidation above this dynamic resistance is very bullish. Volume is clearly declining and currently below average, indicative of volatility expansion being imminent. A break in either direction needs to be backed by increasing volume to solidify legitimacy. RSI trading above 50, establishing consecutive higher lows showing increasing strength in the immediate market. Stochastic RSI currently overbought, however, this oscillator may remain overextended for a prolonged period. Overall, In my opinion, a long trade will be validated upon a successful S/R flip of the 100 EMA. What are your thoughts? Let me know in the comments below! Appreciate you for following my work and development as a trader. As always, Focus on you, and the money will too!
by Kudiiee
LITE buy off the inside day "NASDAQ:LITE"]NASDAQ:LITE Great fundamentals with it being ranked 1st in its group. It broke that 82 resistance prior to earnings and failed but looks to be setting up again off earnings. It did miss guidance as that's the case with a lot of companies right now but it has demonstrated great growth if you look at the weekly and monthly. It has had three inside days in a row which is a sign of sellers and buyers reaching a state of equilibrium with a bullish close on Friday. I'll be looking to start a half position through 82 against the 20 day MA and scale my second half into it once it proves itself.
NASDAQ:LITELong
by Lew2323
THE WEEK AHEAD: AAPL, EBAY, TSLA, X, AMD, FB EARNINGSEARNINGS: Here are the stocks that announce earnings this week that are of most interest to me from a volatility contraction play standpoint: AAPL (85/35), Tuesday, After Market Close. EBAY (82/34), Tuesday, After Market Close. AMD (56/59), Tuesday, After Market Close. TSLA (80/75), Wednesday, After Market Close. FB (54/33), Wednesday, After Market Close. X (55/61), Thursday After Market Close. Although TSLA has the greater than 70% rank/greater than 35% 30-day metrics I generally look for in these plays, its liquidity leaves something to be desired, although I'm naturally looking at after hours quotes here, and they're showing unattractively wide. From a "bang for your buck standpoint" (credit received as a function of share price), the most attractive plays are in AMD and X with their respective February at-the-money short straddles paying 6.39 (12.7% of share price) and 1.25 (13.3%). Pictured here is a delta neutral AMD February 21st (26 day) 43/60 short strangle, paying 1.29 at the mid price with delta/theta metrics of -.21/6.69 and break evens wide of the expected move on both sides. With AAPL and FB, I'm more likely to go out to March to collect a little more and have more room to be wrong, in spite of the fact that volatility contraction is likely to be more muted, with the AAPL March 20th 285/355 15 delta short strangle paying 6.75 and the FB 195/240 paying 4.64. EBAY doesn't appear to be paying more than 1.00 for a 16 delta, so I'm unlikely to partake unless volatility dramatically ramps up here in the next couple of days. EXCHANGE-TRADED FUNDS (SCREENED FOR THOSE PAYING >10% IN CREDIT RELATIVE TO STOCK PRICE IN <180 DAYS UNTIL EXPIRY): USO (54/35), March FXI (53/24), June XBI (50/30), June XLE (32/19), July EWW (31/18), June SMH (28/24), May XOP (25/32), March GDXJ (23/29), May GDX (20/26), May EWZ (13/25), June Here, the rank/30-day ideal is >50, >35%, with only the peskily small USO meeting those criteria. It's just one of those periods when single name premium selling is paying in shorter duration, but exchange-traded sector and broad market funds are not, at least in the 45 day wheel house. Consequently, it's a Hobson's choice of either (a) selling premium in single name; (b) selling sector/broad market, but of longer duration; or (c) hand-sitting. I'm kind of opting for a little of single name and a little of longer duration sector stuff just to keep the theta on and burning. BROAD MARKET (SHOWING EXPIRY THAT PAYS >10% IN CREDIT RELATIVE TO STOCK PRICE): EEM (34/19), September QQQ (25/19), September IWM (26/17), September SPY (21/14), November In spite of the little volatility pop we had last week, duration that pays remains duration that is hugely long ... . VIX/VIX DERIVATIVES: VIX finished the week at 14.56, with front month /VX futures contracts going for 16.05, 16.26, and 16.72 in February, March, and April respectively. If the volatility hangs in there through next week, I may consider adding a small number of units to my VXX short position. Naturally, the pop isn't massive, so I don't want to go all in as though "this is it," since there could be more volatility ahead. By the same token, there could be less, since market memory tends to be short.
NASDAQ:AMD
by NaughtyPines
THE WEEK AHEAD: TWTR, TSLA; GDXJEARNINGS There are a bunch of heavy-hitters reporting this week, but I'll cull it down to the most options liquid underlyings amenable to a decent volatility contraction play ... . Pictured here is a TWTR (40/52) Aug 16th 39/42 short strangle camped out around the 20 delta strikes. Paying 1.30 (.65 at 50 max) with break evens of 31.70/43.30, it's got a delta/theta metric of .73/5.42. Also reporting: SBUX (52/25), FB (45/36), FCX (31/45), CAT (29/29), TSLA (20/60), and AMZN (20/29). As you can see, the rank/implied metrics aren't "ideal" (>70 rank/>50% implied) in any of these, so would probably pass if I was truly picky, and lean toward a play in TSLA out of this group if I was less so, since at least its implied is >50% with the downside being that even that high background implied is at the low end of its 52-week range. The TSLA Sept 20th 205/215/300/310 iron condor is paying slightly more than one-third the width of the wings if mid-price filled at 3.42 with break evens at 211.58/303.42 and delta/theta metrics of -1.14/3.14. BROAD MARKET TLT (34/11) SPY (18/13) IWM (15/16) QQQ (15/17) EFA (11/11) EEM (8/16) As with last week, broad market still pretty crappy here, with pretty much everything at the low end of its 52-week range and background 30-day implied all sub-20. SECTOR EXCHANGE-TRADED FUNDS For yet another week, premium selling opportunities are in gold and the miners ... . Top 5 By Rank: GDXJ (98/38), SLV (90/35), GLD (80/15), GDX (70/32), and TLT (34/11). And, as with last week, the most "ideal" play is in GDXJ. The September expiry should open up and populate tomorrow, which is the expiry I'd probably sell in with August winding down to 26 days 'til expiry. IRA TRADES XLU, XLP: waiting for lower or, at least, the ability to sell not a penny more short puts for something decent that are also not incredibly ridiculously out in time. I may have to reevaluate the price at which I'm willing to take on shares if we stick in here at these levels.
NYSE:TWTR
by NaughtyPines
2