Yo Pit Crazies,

If you were paying attention on Monday, you saw a jaw dropping 2% move in the PowerShares QQQ Trust (Ticker: QQQ).

Inflation is flying and everyone wants to jump into Tech again?

Before disruptive tech became a hot topic thanks to Cathy Woods ARK Invest, there was an Old Tech that used to rock the trading landscape.

That Old Tech currently has the cheapest stocks and vol in the market.

Let’s take a look.

Biotech Stocks Used to Be The Hottest Tech in The Market

I am dating myself here … but Biogen Inc. (Ticker: BIIB) and Amgen Inc. (Ticker: AMGN) were at one time 100% vol monsters that laid waste to the premium selling public.

Now they are seen as old time stodgy companies that just generate tons of cash and no one cares.

A couple of weeks back, I wrote about the iShares NASDAQ Biotechnology Index ETF (Ticker: IBB) that has many of the world’s great tech companies.

I was trading 1×2 put spreads – buy one and sell two – in IBB, trying to get delivery below $125 in the March cycle. Instead, I justended up with short puts going out worthless for 2% on risk for three weeks.

IBB One-Year Chart with IV30 and IV60 on the bottom

Now with volatility diving, I am looking into buying some strangles in IBB. A near-the-money call and an out-of-the-money put.  

There are a million reasons the market could go down lately – but none of them seem to matter.

The Lesson: Buying cheap volatility is a great market hedge and lower risk way to ride a volatile uptrend.

The Rundown

Capitol Gains w/ Frank Gregory

I added some Vale SA (Ticker: VALE) strangles Monday. With Elon Musk contracting directly with the company for nickel, things might get interesting for the sensitive commodity stocks.

It will be among the topics discussed during our live event this Thursday at 11 a.m. ET.

Option Shopper

Licia is jumping in Johnson & Johnson (Ticker: JNJ) puts.

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. 

Cat added some cheap Johnson & Johnson Inc (Ticker: JNJ) puts and Giovanni likes Jumia Inc. (Ticker: JMIA) diagonal call spreads into the UPS deal.

Trading Legion

I bought some SPDR S&P 500 Trust ETF (Ticker:SPY) April 20 455/445/435 put flies with just one upside SPY call Wednesday.

I closed the put flies up 70% and now I am riding a straddle for almost nothing to April 20 with the calls now looking like they might pay.

Volatility Edge & Volatility Trading Club:

In Volatility Trading Club trades I closed trade No. 287 for a 30% gain.

Remember, a lot of vol strategies I use are market neutral. That means whether SPX or VIX go up or down, the positions still make money. This is a technique you can learn in the Volatility Trading Club and Volatility Edge!

To Your Trading Success,

AG