BY MARK SEBASTIAN
March 26, 2024
Hey Traders,
The SPX pulled back on Monday…nothing huge but at thebut the end of the day, the selling was actually in relative term aggressive.
Remember I have been telling you to watch vol relative to SPX…
If Friday was a bottom we will continue out path of higher lows and higher highs
I do not know when this party ends…but it is going to end…and it is going to be bad.
So what is the play? Well it’sits a bit complicated…
The VIX is still pretty low and the market does look like it is coiling for a move…but realized volatility has fallen off a cliff the last 3 days:
10 day vol is down to 9% and 20 day is down to 9.5%
This is going to make owning strangles really hard…
I would look at bull calendars hedged with a long call.
That play will likely pay because at least near term, I do not think any sell off is going to be multi-standard deviation. I would be long the 5050 bear calendar and long a 5250 call.
Its a good play…an even better play…WPC.
THe best approach for this market is Andrews weekly profit cycles. It produces pretty darn consistent returns and has an embedded hedge in the program.
It is the perfect approach to run over a stock portfolio.
Your Only Option,
Mark Sebastian
Mark Sebastian
Founder & CEO, Option Pit
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