The market took kindly to the news that Russia is poised to reopen the Nord Stream 1 pipeline.

We all know the EU needs the gas and Vlad needs the money, but realpolitik around nat gas complicates things

My partner in trade, DC insider Frank Gregory, thinks that, if it holds, this could be a light at the end of the Ukraine conflict tunnel.

A near 3% rally in the S&P 500 should be good news. Did the VIX agree?

Let’s see. 

The July 25 FOMC Rate Hike Still Rules Volatility

An up day in the market normally should be a volatility crusher.

This was not the case yesterday.

SPY July 29 400 calls jumped in IV, even on a down VIX day. To be quite honest, 23.07 IV is woefully cheap given the 2.7% move in SPY.

SPY Jul29 400 call price and IV today

I don’t see IV coming down until next week post-FOMC, and 400 call calendars should set up well in SPY, buying the July 29 cycle and selling nearer term.

It is a trade I am likely to add to OP Mentoring as the market starts to ride earnings a bit higher.

Sometimes when all the news seems bad, things can surprise us.

The Roundup

Nitro Trader

Mark and I put on a long Chevron Corp (TIcker: CVX) and short US Oil Trust (Ticker: USO) last week that is up around 20% as I write this. One more day and we’ll close the CVX calls for 100% gain and ride the USO short for a bit.

Mark Sebastian grabbed a 3% gain on some ExxonMobil Corp (Ticker: XOM) call flies and puts. Not a lot of profit, but the hedge saved this trade with some timely management, as we closed the puts when XOM tanked two weeks ago.

Option Shopper

Licia’s stroll through Gap Stores Inc (Ticker: GPS) pulled down 156% in a few days. That is some shopping!

Big Money Shopper

Licia and Mark teamed up for a 45% gain in Nikola Inc (Ticker: NKLA) calls.

To Your Trading Success,

AG