BY ANDREW GIOVINAZZI
January 12, 2024
Yo Pit Crazies,
We had a rocking day at Option Pit. I got to close a lot of puts in my products like OPMentoring and Easy Trade Button. What would be really great is a move up in the SPDR S&P 500 Trust (Ticker: SPY) over the next few days. I think it will do that simply because a hot inflation number did not crush the market.
That brings investors to other topics. Like Bitcoin. If you want to know why Wall Street has been chomping at the bit for a Bitcoin ETF, look no further in the fees there are going to collect for managing the ETFs. This list is courtesy of Funcle Tim in our Pro Chat. The fees are big considering they are only buying one product.z That won’t stop Wall Street from cashing in.
Remember in 2008 when Wall Street securitized risky mortgages? Yeah me too. If there is a buck in it, Wall Street will make it happen. That also means this will be a wild ride for a while. Look for some goodies from Option Pit soon on the Crypto ETFs.
MLV pumped out a note at the bottom in the Pro Chat log I posted.
Why did he do that?
Trading strangles is an easier way to manage moves in the market
What MLV was saying is that the calls in the XSP strangle were paying for the trade. That is a good place to get ready to close them. Those calls in particular had a 10x+ jump from .28 to over $3.00.
At the time we posted the calls in the Trading Desk they were over $1 and the market direction was far from clear waiting for the bond auction to come out. That was the last piece holding traders back on a volatile day. We posted a strangle, long a call and a put with different strikes, just in case things got worse and it ended up being a modest pay day.
But stocks could have easily cratered and killed the calls so the puts would have come in handy. We trade strangles in many products at Option Pit like the Easy Trade Button, Nitro Trader, OPMentoring, Pro, Trading Desk and 0DTE.
Learn to trade and not care which direction the market is going.
This weekend I will post my Pro Style Quarterly Hedge here in OP Newsletter. Stay Tuned.
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
See what's hot at option pit
CAPITOL GAINS: SMR Aug16 7 call closed for a 150% gain
DELTA STRIKE: VLY Mar15 8 puts closed for a 88% gain
PFE May17 26 calls closed for a 66% win
OP MENTORING: SPY Mar22/19 510 put calendars and 520 calls for 6.4% gain
OPTION SHOPPER: ERX Mar28 65 calls closed for a 90% gain