BY ANDREW GIOVINAZZI
June 27, 2024
Yo Pit Crazies,
Voz free for Friday sounds like a good deal to me. Jump in and check it out for the most dynamic trading show at Option Pit.
Mark is going deep into the 0DTE closing tricks to avoid pattern day trading today. Mostly what it is is a great working knowledge of option trading. Trade a few million contracts and you learn things. That is one of the advantages of Option Pit, deep practical knowledge. It is like learning how to fix an engine from a mechanic who has been doing it for 30 years.
Talking to folks in the Trading Desk today, I reminded them when trading the broad market like SPX what is the most important thing.
What is your opinion? No
What is the volatility? No
I will save you the trouble it is what is on the calendar. The Presidential debates are on the calendar with the PCE inflation number and we will know what is up on Friday.
So how does the market price that?
Events make the liquidity providers raise prices for the same amount of time
How do I know this? I was one for 15 years, Mark 10 years and Licia for 15 years. That is 40 years and 20 million option contracts. Also, players will wait to place trades while an event is in play. Traders would rather ride a sure wave than place a big bet prior.
The liquidity provider will just pump up the volatility in the options to overcome the daily decay. Trade 1 Greek for another, Theta and Vega. That is just time for volatility.
Look for my Greek Exposition in Option Pit University coming soon.
If the PCE number is just in line post-debate, SPX will fly as the market is waiting for a reason to go higher. Hard to imagine there will be any surprise from the two candidates but that is why the VIX has a bid!
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
See what's hot at option pit
CAPITOL GAINS: SMR Aug16 7 call closed for a 150% gain
DELTA STRIKE: VLY Mar15 8 puts closed for a 88% gain
PFE May17 26 calls closed for a 66% win
OP MENTORING: SPY Mar22/19 510 put calendars and 520 calls for 6.4% gain
OPTION SHOPPER: ERX Mar28 65 calls closed for a 90% gain
Events make the liquidity providers raise prices for the same amount of time
How do I know this? I was one for 15 years, Mark 10 years and Licia for 15 years. That is 40 years and 20 million option contracts. Also, players will wait to place trades while an event is in play. Traders would rather ride a sure wave than place a big bet prior.
The liquidity provider will just pump up the volatility in the options to overcome the daily decay. Trade 1 Greek for another, Theta and Vega. That is just time for volatility.
Look for my Greek Exposition in Option Pit University coming soon.
If the PCE number is just in line post-debate, SPX will fly as the market is waiting for a reason to go higher. Hard to imagine there will be any surprise from the two candidates but that is why the VIX has a bid!
To Your Trading Success,
AG
The Gulf of Maine and the shoreline offer 1000s of fishing spots. An almost unlimited supply of places to go. Right now the stock market, with 1000’s of names to trade, has only one place to go.
That stock is Nvidia Inc. (Ticker: NVDA). On a low volume Tuesday in the June heat, NVDA managed a day where the fund manager had a chance to buy the stock not at all time highs. So they all jumped in and the performance lifted all high quality tech.
Yo Pit Crazies,
It is Voz Free Friday this week. Check out Voz and Mark as the dynamic duo of trading on the close every day in Trade to Close.
My close Tuesday was a bit different, a buddy wanted to go Striper fishing so I did this: