• Brandon

Trade Ideas | 10/15/18

IV remains high across the market as buyers and sellers seem to be in a standoff. There's not a lot of will to send the market higher or lower ... yet.

Because a lot of stuff is on the move and at price extremes, this list will contain more directional trades than usual.

High IV, Delta Neutral

$C - Citigroup reported earnings last Friday, yet IV remains relatively high. This is probably reflective of the overall nervousness in the market right now, however, I still expect IV in $C to drop as is normal post-earnings. An Iron Fly is the best way to play this because trying to construct an Iron Condor is too difficult because of strike selection (This is technically breaking a rule laid out in the Comprehensive Trading Course - so proceed with caution)

$XLU - Utilities gave up their recent gains because of the market turmoil of last week. Again, I expect things to calm down this week and for IV to drop, so selling a Tight Iron Condor in $XLU would be a good way to play that.

Directional Trades

$GLD - Ah, here's the pop in gold that I was expecting during the initial market sell-off. Why it's coming late is beyond me, truthfully, but it IS late. $GLD looks short-term overbought and if it looks like it is going to close below where it opened today, I think a Bear Call spread is a good way to play a short-term down move; this is also a good way to play declining IV, which happens when $GLD trades down, not up.

$EWJ - Global markets trade in tandem when they sell off and Japan was included in last week's drop. Today however, we are seeing an attempt at a bounce. If it looks like $EWJ will close above where it opened, a simple Bull Call spread is the way to go - there isn't enough premium to be had in OTM puts for it to be worth selling a Bull Put spread.

$XLE - Oil and Energy stocks are selling off too, but this has some headline risk because of recent events in Saudi Arabia. $XLE is trading near strong support levels, so if you want to take a risk, I'd say selling a Bull Put spread here is OK, just keep it on a short leash.

Featured Posts
Recent Posts
Archive
Search By Tags
Follow Us
  • stocktwits
  • Twitter Basic Square
  • Facebook Social Icon
  • YouTube Social  Icon

Follow us on Social Media!

  • tradingview
  • stocktwits
  • Twitter Social Icon
  • Facebook Social Icon
  • YouTube Social  Icon

All content is for informational purposes only. Nothing on this site is a solicitation to buy or sell any security. The past performance of any investment, investing, or trading strategy or style is not indicative of future performance. Nothing on this site is intended to be investment, accounting, tax, or legal advice. See full disclaimer here.

Options are not suitable for all investors. Prior to trading securities products, please read the Characteristics and Risks of Standardized Options

© 2017-2020 CLT Options, LLC - Legal