Yo Pit Crazies,
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- More Delta variant news yesterday, but VIX was down.
- New York makes it tough on the unvaccinated, but it could be worse.
- About-face out of the WH on rental evictions as Congress sits on $42 billion of unreleased aid.
- Silver gaps up yesterday — only to get talked back by another Fed board member as rates are set to rise in the future.
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Mixed signals like clockwork.
I think that is an oxymoron of some sort.
What ain’t mixed is the rally in biotech.
Biotech Surge
Speaking of more, check out what is in the iShares Biotechnology ETF (IBB). Both Novavax (Ticker: NVAX) and BioNTech (Ticker: BNTX) are grabbing more big-country contracts and those stocks are up 18% apiece.
BNTX one-week chart with one-min candles.
IBB made six-month month high yesterday and the amount of money going into mRNA vaccines is getting to be very serious.
Also, the nature of the virus is making it appear like these vaccines will be annuities for some of the drug companies.
There are some decent debit and credit plays in IBB and we will explore them in Capitol Gains. Sign up now so you don’t miss them for next week.
The Lesson: ETFs are a less volatile way to trade or invest in a hot sector if the single names are too crazy.
The Rundown
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 using the rally today to take profits:
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- Ken A. closed Activision Blizzard (Ticker: ATVI) 80/87 call spreads, taking a 33% gain. ATVI is always a fickle friend after earnings
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Robinhood Trader:
Option Pit CEO Mark Sebastian uses the Robinhood Gamma Radar to find order flow in active names.
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- Mark kept his Apple (Ticker: AAPL) mojo with a 12% gain on puts. AAPL reversed and he took the bucks.
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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.
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- I am working a wheel trade in BP (Ticker: BP) to grab the dividend next week.
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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 Yellow. VVIX is still above 100, and the Delta variant is putting a monkey wrench into what is a very low realized vol setting for SPX.
Note below that the 25 delta SPX Sept. 03 4255 put IV dropped yesterday on a down VIX, down SPX day. The skew is getting flatter on the downside, so that is usually bullish.
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