NaughtyPines

NaughtyPines

THE IRON CONDOR: The iron condor (IC) is a defined risk options strategy that can consist of a short strangle enveloped by a long call at a higher strike price than the short call and a long put at a lower strike price than the short put or a short straddle enveloped by a similar long call/put setup and operates on the assumption that the price of the underlying...

NaughtyPines

THE SHORT STRADDLE: The short straddle is an unlimited risk options strategy that assumes that the underlying will remain in a particular range for the duration of the trade and consists of a short call and a short put at the same strike price. It can be skewed directionally or advance a neutral bias, and maximum profit is realized if the price of the...

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THE LONG STRADDLE The long straddle is a defined risk options strategy that assumes that the price of the underlying will move outside a specified range in the lifespan of the trade. It can be directional or neutral in bias, and consists of buying a long call and a long put at the same strike price. If the price of the underlying does not exceed the BE on...

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SHORT STRANGLE: The short strangle is an unlimited risk options strategy that consists of a short put and a short call. It can be directionally skewed bearish/bullish or it can be neutral and operates on the assumption that price of the underlying will remain in a range for the duration of the trade. Upon expiry, if the price of the underlying remains between...

NaughtyPines

With volatility having bled out of the broad market indices, I'm looking for any premium selling plays (in addition to earnings plays) that I can find. With an IVR rank of 75 and at or near all-time highs, XBI (S&P Biotech ETF) presents a possible premium selling play via short strangle or iron condor. Possible set-ups: Aug 21 235/240/300/305 IC; 66% POP; BE's...

NaughtyPines

With earnings to be announced on 7/21 after market close and with IVR currently at 64, AAPL is not yet ripe for a premium selling earnings play. Ordinarily, I look for IVR to be >70 before considering an earnings play short strangle or iron condor. In all likelihood, though, I will overlook the IVR being below 70 and go ahead and make a play, since IVR will...

NaughtyPines

GOOG, NFLX, now CMG. Earnings are to be announced in 3 days (7/21) after market close. Expected move is currently between the 620 and 700 strikes (for 7/24 Weekly Options Expiry). Ordinarily, the options play for earnings announcements where the IVR is 70+ is either via iron condor or naked short strangle with the short call/put strikes placed at or near the 1...

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With UVXY at 52-week lows, it may be worthwhile to consider whether going long via a short put spread could be productive; I have worked various set-ups with VXX, but cannot get enough juice out of a play in light of the underlyings's low price. The drawback of UVXY from an options standpoint, however, is that it is frequently "illiquid" (i.e., bid/ask spreads...

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With IVR around 10 or below (6-Month Dough) in the indices, it's hardly a premium seller's market, at least as far as the indices are concerned. If that is what you strictly do, then you -- like me -- are probably doing a bit of hand sitting, managing the trades you put on when volatility was high, or looking for other premium selling plays, such as earnings...

NaughtyPines

Being more of a long-term trader, holding positions for between 20 and 35 days, I'm kind of the view that SPY is in a long-term side sideways formation ... .

NaughtyPines

With the IVR in TLT remaining relatively high (82; 6-month Dough), I'll be looking at TLT for a play this week (Aug 28 expiry). The current 1 SD lines are at about 123 on the call side; 109.50 on the put side, and it's ripe for a potentially productive short strangle (109.5/123 short strangle; Aug 28 expiry; 1.44 credit; BE's at 108.06 and 124.44). The natural...

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Nothing much has changed this week in terms of my view regarding where to set up the strikes for short call verticals for SPY (short leg at 213/long leg at 216-7) either as a stand-alone strategy or as part of legging into an Iron Condor. For the short put vert end of things, I'm generally relying on the software to guide me there, with the short put strike at...