Trade Ideas | 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.
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.
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.
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.
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.