• Brandon

Trade Ideas | 7/31/18

Volatility continues to remain low, but I think that if $AAPL and $TSLA miss on earnings this week that the market may slide a little bit, sending the $VIX up. Who knows. Anyway, those aren't the stock I'll be sharing ideas about...

$DHI - DR Horton has traded in a range between 47 and 41 for the majority of 2018. The stock just had earnings, so I expect the resumption of sideways trading. IV is above the 50th percentile so I think an Iron condor is safe here, being short the 47 calls and 41 puts for September expiration.

September 38/41/47/50

Range bound trading = delta neutral

$USO - Oil has been trading up this year but it looks to be stalling out here near the highs at 15. IV remains elevated at the 65th percentile so why not sell premium? Because of the strike selection and where the stock is currently trading, I would suggest a very tight Iron Condor, selling the 14.5 calls and 14 puts for September.

Breakeven at the highs and lows

September 12.5/14/14.5/16

$PCG - Pacific Gas and Electric took a huge tumble at the end of 2017, trading down from a high of 71.57 to a low of 37.3 in February. Since then, though, the stock has been trading pretty much between 39 and 47.5. With earnings out of the way I expect that sideways trend to continue, and since IV is above the 50th percentile, an Iron Condor is OK, however, options on this stock trade in 0.05 increments or what I call "Nickel Ticks." That tends to be a sign of illiquidity, so I'd be cautious about that.

Nickel ticks, mismatched strike width

Range bound trading = delta neutral

Featured Posts
Recent Posts