Cyber Time

Yo Pit Crazies,

 

I seem to remember former President Trump not too long ago talking about “the cyber.”

 

Parsing through his words, he meant cybersecurity.

 

Last week, some heavy hitters went to the White House to talk with President Biden about “the cyber.”

 

It is a growth industry, so let’s check out a couple of plays I’m excited about …

 

The Easy BUG Play and the Harder FEYE Play

 

Why is GlobalX Cyber Security (Ticker: BUG) an easy play?

 

For one thing, I owned it in the Power Moves Portfolio and sold it for a nice 60% gain — and then it soared more than 200%.

 

A patient bid for calls should work well here as “the cyber” stays in the headlines.

BUG 1-year price chart with 1-day candlesticks.

 

Contrast that performance with FireEye Inc. (Ticker: FEYE) below. This is a stock the market cannot like for any length of time, but it is profitable and probably a better put write candidate.

 

FEYE 1-year price chart with 1-day candlesticks.

 

I showed folks in Capitol Gains how to make a trade out of this. It just takes a simple trick or two.

 

A put write at the 17 level looks decent in FEYE.

 

The Lesson: Some stocks work better as call buys and some work better as put sales.

 

The Rundown

Capitol Gains w/ Frank Gregory
Option Pit DC and Wall Street insider Frank Gregory and I run a portfolio approach to trading options with stocks that have good long-term prospects based on Frank’s K Street knowledge and my options expertise.

Capitol Gains membership is open again!

 

If you missed your chance to get in the first time around, Frank and I have opened the door for a limited time.

 

• • • The 12 50%-plus wins in 12 months guarantee remains.
    • Look for a glimpse into my FEYE/BUG pair next week.

 

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. 

 

The Pro Room was liking the rally yesterday:

 

• • • I closed some VXX Sept. 03/Sept. 10 24.5-strike put spreads for a 61% gain.
    • Jason, like many Pros, jumped on the Apple (Ticker: AAPL) train and short VIX/UVXY train. He says:
      • “Stopped out on my last $AAPL 155 calendar at 1.60, +47%, still holding all the 146 puts … stc 30% of $uvxy 3/10sept 20.5/20 puts for 0.23, +110%”
        

Sharp Bets:

Each week, Option Pit CEO Mark Sebastian looks for low-volatility, mid-term duration call buying and put buying opportunities.

 

• • • Mark went yard with APPL yesterday with a 62% gain on closed calls. Good week going in there.

 

Trading Legion:
The Trading Legion is an intermediate-level education and a long strangle trading vehicle. The goal is to teach students the best times to buy options.

 

• • • I closed some of my Walgreens (Ticker: WBA) call spreads for a 40% gain yesterday and I used the gains to relever up on some risk reversals.

 

Volatility Edge & Volatility Trading Club:

Volatility Edge is run by Mark and uses the proprietary Option Pit VIX Light indicator to guide volatility trading. The Vol Trade Club is run by me (AG), and employs a long strangle strategy that seeks to use VIX future decay to pay for upside VIX, VXX and UVXY options.

The Option Pit VIX Light Is Red with VVIX still above 100, but term IVs in Sept. and Oct. dropped below 100 today, which is as low as I have seen this year. 

 

There is still big contango in the VIX futures, which normally suggests much slower drops in VIX.  

 

Mark has three open trades in Vol Edge — including No. 114 for a 47% gain — and some open positions

 

I have VTC trade No. 258 on. Closed some puts for a 50% gain and am deciding whether to keep the financed downside in SPY.

 

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