May 30, 2017

Archives for May 2014

Just the Indicator Tonight

Going to keep it short tonight. Subscribers expect to see a trade or two tomorrow.   If you are a believer in a statistical approach towards investing please do not hesitate to try my options strategies. I use simple mean-reversion coupled with probabilities for each and every trade. Give it a try, it’s free for 30 days. If you haven’t had a chance,  please join my Free Weekly Newsletter, Twitter feed and/or Facebook page. … [Read more...]

Selling Puts on Twitter and a Few Credit Spreads

In yesterday's post  I mentioned a bull put spread in UVXY. well, if I liked it then, I love it now. I mentioned the June 42/41 bull put spread going for $0.30. The spread is now selling for approximately $0.38. But, that was yesterday and UVXY decided to push 3.8% lower today. But it doesn't hide the fact that the spread still has a 78.56%, down from 80.23% yesterday. Moreover, the delta of the 42 strike sits at 0.16, so we are still safely below an adjustment of any kind (typically occurs when the the delta hits 30-35). Another underlying that looks interesting for a credit spread trade, more specifically, a bear call spread, is in the XLE. XLE has pushed into a short-term overbought and the June 99/101 spread is trading for … [Read more...]

Potential Bull Put Spread in UVXY

Yesterday I received an email from one of our loyal readers asking to add Ultra VIX (UVXY) to our mix of highly-liquid underlyings we follow. UVXY, like VXX suffers from contango, so there is a natural bias towards the downside. However, the implied volatility is almost twice that of VXX which is appealing as a seller of options. Of course, that is to be expected since it is the "ultra" VIX, but the UVXY is liquid enough to put on some decent spreads and I'm still comfortable selling options with volatility levels that high. Just remember, as always, keep your position-sizing in check. Anyway, if you take a look at the chart below you will quickly notice that UVXY is in a short-term oversold state. The pop higher occurred today … [Read more...]

How I Define a High Probability of Success Trade

Volatility as seen through the Ipath S&P 500 Vix Short-term Futures (VIX) hit a new low today. Inherently VXX is biased towards the downside due to contango, but just looking at the three month chart you can see the push lower has been swift enough to push the RSI (5) into a "very oversold" state. The market itself has been teetering at all-time highs and the timing couldn't be better for the "sell in May" believers. The "worst six months" as named by The Stock Trader's Almanac officially began today. When coupled with an area of strong overhead resistance the odds favor the bears...and I plan on playing it that way. Of course, as always, I'm going to use a high-probability trade so that even if I'm wrong about my directional … [Read more...]

Be on the Lookout…Trades are Coming

Keeping it short tonight. The monthly jobs report is out tomorrow and my hope is for a push higher at the open. This will certainly push many of the underlying ETFs we follow into an overbought state. And a push into overbought territory coupled with strong seasonality ahead (third trading day in officially kicks off "Sell in May") is often a good area to start selling some options premium using bear calls spreads. Get ready... If you are a believer in a statistical approach towards investing please do not hesitate to try my options strategies. I use simple mean-reversion coupled with probabilities for each and every trade. Give it a try, it’s free for 30 days. If you haven’t had a chance,  please join my Free Weekly … [Read more...]