And Then There Were 3

Andrew Giovinazzi

Yo Pit Crazies,

Another Titan has fallen!

And that Titan is Netflix Inc (Ticker: NFLX).

Of the five FAANG stocks –- Meta Inc (Ticker: FB), Apple Inc. (Ticker: AAPL) Amazon.com (Ticker: AMZN) Netflix Inc (Ticker: NFLX) Alphabet Inc (Ticker: GOOGL) – two are down in the 50% area from the highs in 2021.

That drop is also putting a cap on stock prices.

The go-go days are getting thin.

But we have a trade idea to discuss.

The Two Things for an Option Trade are Edge and an Opinion

The FAANG selloff is certainly putting a damper on stocks.

Two marquee names (NFLX and FB) are not helping lift the Invesco QQQ Trust (Ticker: QQQ) to the dizzying heights enjoyed in November.

That is part of what informs my opinion for this week …

We can rally – but not too much as $450 SPDR S&P 500 Trust (Ticker: SPY) is looking like a magnet. That helped set up the strikes on my SPY calendar.

Next I needed to find a volatility edge and for that I turned to our Edge Hunter sheets – my trading Rosetta Stone. I ended up with a calendar spread on the 450 line that had a 16% forward volatility. That means I was paying 16% volatility when VIX was 20%. What a deal.

That was my edge and now I will see how the trade plays out with a put hedge.

WATCH: The Video recap is here for the trade idea.

Capitol Gains w/ Frank Gregory

I closed the balance of my Vale SA (Ticker: VALE) puts for a 150% gain. Now I wait for the upside.

The live Power Moves Portfolio trade log is here.

Power Income Trader:

Bill Griffo go live for Power Moves members today. Here’s the latest from Griff:

Europe finally announced raising rates to fight inflation while mentioning a potential July start … Bonds rallied on that and I jumped back on an IEF June17 call spread that will get you past two Fed meetings and an earnings season that I believe will show that the economy is slowing … The Fed will have to walk back a few of the nine tightenings priced in for this year and, in my opinion, IEF will rally to the $106 dollar price by expiry.

Option Shopper

The Shopper went to the bank with Wells Fargo Inc (Ticker: WFC) for a 48% win in the calls.

Pro Trading Room:
The Pro Room is Option Pit’s live access to Mark and myself during trading hours. Our Pro students post trade ideas with Mark and me during the entire trading session.

Big Flow back in Global X Uranium ETF (Ticker: URA) calls: