Trade Ideas | April 2, 2018

April 2, 2018

With market volatility once again on the rise, here are some things that I'm looking at:

 

$XOP, $XLE, $XLU

Looking to place short vega delta neutral positions on these this week in the May expiration. All 3 ETFs have sideways price action and high implied volatility with good liquidity. Will probably pick between $XOP and $XLE as they are quite correlated, and then trade an Iron Butterfly in $XLU sometime this week.

 

$EEM

Very high implied volatility in the merging markets ETF, but, it is recently quite correlated with $BABA, which I already have a position on that is not going the best right now. I would like to be delta neutral on all my short vega trades but if $EEM continues to sell off with the rest of the market, I will have a reason to have a positive directional bias and thus trade a delta long position. We'll see.

 

$KR

This stock has done virtually nothing since the drop from earnings a couple weeks ago. Implied volatility remains high, but not extremely so. With the price action being sideways I would like to trade either an Iron Butterfly or a very tight Iron Condor at some point this week.

 

$GLD

This ETF is on my radar for a position of some type to be considered because implied volatility is high. I don't know how I would like to trade this yet, if at all. Stay tuned. Will be talking about it on StockTwits as the weeks progresses.

 

$ORCL, $FB

These stocks have gotten beaten up over the last few weeks. I would keep these on the long position radar because they are becoming quite oversold. Most other stocks are being sold off but not extremely so; most of them are retesting the February lows and so are not getting into oversold territory yet. If the overall market continues to sell off this week, the now 9 year old bull market could be on its last leg. Quality long positions will be few and far between at that point. Watch and wait.

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