BY MARK SEBASTIAN
February 1, 2024
Hey Traders,
I spent the last week pounding the table that options were way too cheapto cheap leading into this week.
The market was complacent.
Here is an example of what I mean:
Leading into the FOMC the straddle for options expiring on the 31st looked like this:
The At the Money straddle was priced about 34 dollars…we moved 80!
You would think the market would learn its lesson…It has not.
Between when I am writing this and when this straddle expires we have:
AAPL Earnings
AMZN Earnings
META Earnings
ISM
Non-Farm Payrolls
A whole bunch of other earnings
….oh and did you see NYCB: we could have another banking crisis developing:
Yet, take a look at what it will cost you to be long the ATM straddle in SPX for the end of the day on Friday February 2nd
They are pricing in about 45 dollars of movement over the next 2 full trading days….less than 1%.
I can make money owning this.
I would buy this straddle and buy VIX puts…ill probably make money on both.
Questions about that? Leave a comment below!
Your Only Option,
Mark Sebastian
Mark Sebastian
Founder & CEO, Option Pit
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CAPITOL GAINS: SMR Aug16 7 call closed for a 150% gain
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