Hey Traders,

Happy Friday!

Just a short one today.

This chart is starting to worry me:

S&P 500 futures keep holding up strong, and yet the VIX futures keep going up and up and up. Since the low on Wednesday of 13.50, the futures are up .85.

This is the market telling us it is getting worried.

In the coming days we have a bunch of huge earnings and a Fed meeting. I’m wondering which one is going to derail this market….I am going to kill my longs by Monday next week.

If I am wrong, it’s not hard to get back in. If I am right though … $$$$!!

Here are the most interesting trades from Thursday:

Intel Corp (Ticker: INTC): This is a naked risk reversal in INTC, with the trader selling the April 42.5 put to buy the April 55 call. Likely, the trader is using this as stock replacement, setting their entry prices for INTC.  Given earnings, this seems like a smart play.

American Airlines Group Inc (Ticker: AAL): We are going to take a hard look at the airlines tomorrow based on this big bullish sweep in AAL. The trader bought the March 16 calls for .45 for some size. Pretty darn bullish.

United States Steel Corporation (Ticker: X): I continue to think there is serious risk of this deal being killed by regulators, and traders are positioned as such. This might make for an interesting back spread.

Astria Therapeutics Inc (Ticker: ATXS): Here’s a new one! This is an opening call spread buy,  with the trader buying the April 10 calls and selling the 15s. This is pretty bullish on this biotech. I’m guessing there is an FDA story around this one.

Vale SA (Ticker: VALE): A trader bought the March 12-10 put spread in VALE for .18. Given the run this has had, I think this is probably a hedge, but it is worth noting. Wondering if the X trade and this one have anything to do with one another.

Position updates:

DOW:  New Trade

DKNG: Let’s see how this one goes … will probably bite me in the butt.

TSM: Flattish. We close tomorrow if we don’t get a pop.

KDP: Flat

BAC: Keep those offers out to close between 1.10 and 1.20

CCJ: Down big on Thursday, lets see if there is follow through

BP: We are near a partial close

ETRN: Down small

USFD: Trade is up about 20%

SB: might be getting ready to squeeze

SHEL: These calls are .15, oil stocks have gotten “shelled”. I am just going to hang on here.

BGC: We will kill this winner by Friday.

IOVA: Let’s see where this goes when the near dated selling ends.

EDR: I think there is more upside and the longs did not bail on this one, so worth holding till Friday.

Your Only Option,

Mark Sebastian