Trade Ideas | 9/18/18

September 18, 2018

Here are today's trade ideas!

 

High Implied Volatility, Delta Neutral

 

$EWZ - both of the previous $EWZ trade ideas were profitable and taken off today. IV remains very high in this ETF, so why not continue to sell premium? The breakeven range is still quite good because IV remains elevated. Reload!

 

$AAPL - same story for $AAPL; the previous trade idea in this stock was profitable, IV remains high, reload and sell more premium.

 

 

Low Implied Volatility, Delta Neutral

 

$EWJ - Japan is flying high today, and has been on a tear over the last few sessions. It's moved far a little too fast, however, it's now trading close to the levels it has been trading for most of 2018, so I don't think a pullback is in the works. Instead, I think $EWJ trades around the levels it's been at all year, with the off chance of rising IV in the face of Trump's "trade war." Therefore, a Nov/Jan19 Calendar would be a good way to play that.

 

$M - this stock rose into earnings which failed to impress. I expect the stock to remain below the highs reached pre-earnings, but also stay above the recent lows around 32. IV is extremely low, and the previous two times it was at these levels, it steadily rose, irrespective of price action. So, that would mean a Nov/Jan19 calendar is a good way to play this.

 

 

Directional Trades

 

$GLW - this stock is definitely overbought, but it has failed to continue a retracement to the 20 day moving average, which is typical of stocks when they trade outside Bollinger Bands. The stock is showing some strength today, so maybe sit on this one for a day or two and wait for weakness to jump into an ITM/ATM debit put spread.

 

$CREE - this stock has been beaten up as of late, but when stocks trade below their Bollinger Bands, they typically retrace to the 20 day moving average, as shown on the chart. I think an ITM/ATM debit call spread could be a good play here.

 

 

 

 

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