Trade Ideas | 2/20/19

February 20, 2019

The $VIX continues to decrease, but now as the S&P500 reaches stiff resistance at 2800, it's possible we see a small uptick in IV. That has little bearing on these trade ideas though, and with the chance of a rate hike at the March Fed meeting sitting at ~0.00%, I don't think there's a catalyst coming that would drive $VIX up. So I continue to be short vol with Iron Butterflies.

 

$TWTR - The stock has held a range between 28 and 34 for the better part of a year. I think that is likely to continue now that earnings (potential trend-setting catalyst) are out of the way.

 

$EWZ - The Brazil ETF has been a huge cash cow for me over the past 8 months. I have been reloading trades on this underlying for the bulk of that time with great success. Why should this time be any different?

 

$MSFT - This stock has had a big run (like much of the market) since the December lows, and (like much of the market) is probably looking to pause for a bit. $MSFT has held the range of 102 - 112 for a good chunk of time over the last year, and I expect that to continue as this past earnings seem to have come in with expectations.

 

$AAL - The range on this trade is admittedly tight, however, if $AAL stays calm (IVP = 14) for just a couple of weeks, like it has been, we'll get a nice profit.

 

$AIG - The range on this trade is rather tight as well, but the risk being carried is minuscule. If $AIG maintains the range it's held since early January for just another couple weeks, there's good profit to be had.

 

 

 

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