Yo Pit Crazies,
Don’t forget to catch Griff’s live session today. He rang up another big win – 216% on SPY put spreads – yesterday.
Register here for his no-cost session at 1 o’clock.
I went over in the Pro Class last night that Pres Biden’s speech could be a big deal but I did not know how it was going to go – more lockdowns or fewer.
As of this morning, the White House is choosing a more measured rollout.
Joe is taking a moderate path and stocks are higher today.
I would then assume we rally a bit today and maybe the Santa Rally is back!
Let’s check it out …
SPY Call Calendars Look Cheap
The Pro Students and I ran through several scenarios, and the best we cooked up is the SPY Dec. 23/29 465 call calendar for a bit more than $1.
There are also some very cheap SPY Dec. 22/23 465 call calendars for $.15 or so.
The reason they are cheap is the opportunity to buy a forward volatility around 16%.
The 10-day average volatility for SPY is closer to 18.5% close-to-close. The intraday volatility is much higher.
Don’t be surprised if I post a Trading Legion call calendar with a put hedge this morning.
The Rundown
Option Shopper
Licia Leslie puts on her best trading shoes to find option bargains using market making and charting experience. Generally debit options and spreads with low risk, high reward setups. Short hold times are the norm.
-
-
- The Queen of the Candlesticks is gearing up for her weekly Shopping Spree today at noon EST.
- Want in? You’ll have to call Customer Care at 1-888-872-3301.
-
Capitol Gains
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.
-
-
- I am holding my diagonal call spreads in Cliffs Natural Resources (Ticker: CLF) and Ford Motor Co. (Ticker: F) and will look to close the short calls this week. I want to keep long term longs in these positions.
-
Other stocks currently in the CAPITOL GAINS portfolio:
-
-
- Mandiant Inc. (Ticker: MNDT) long cybersecurity
- PetroBras SA (Ticker: PBR) long oil
- SPDR Oil and Gas Explorers (Ticker: XOP) long oil
- Invesco QQQ Trust Series 1 (Ticker: QQQ) portfolio hedge
- Canejo Corp. (Ticker: CCJ) long Uranium play
- Ford Motor Company (Ticker: F)
- Palantir Technologies Inc. (Ticker: PLTR)
-
Power Income Trader:
Power Income Trader is a systematic approach to trading inflation. By pulling real-time data from the Fed, US Treasury and Gov’t, Power Income Trader alerts users on changes in money flow driven by Fed policy. Bill’s system puts you out in front of the most powerful money flow in the world.
Bill added some iShares Barclays 20 year Gov’t Treasury Bond ETF (Ticker: TLT) put spreads into the rally. This could just be a knee-jerk reaction from bonds to Omicron.
Don’t miss out on Griff’s no-cost LIVE event today at 1 p.m. EST.
Big Money Flow
Each week, Option Pit CEO Mark Sebastian looks at size institutional option buying with a twist. He mostly buys calls or puts to ride the large momentum trades.
-
-
- Mark closed the balance of his Uber Technologies (Ticker: UBER) calls for 108% gain total.
- Kraft Heinz Inc. (Ticker: KHC) calls are looking good too, up 45% so far.
-
Robinhood Trader:
Option Pit CEO Mark Sebastian uses the Robinhood Gamma Radar to find order flow in active MEME names.
-
-
- Mark added some Pro Shares Trust Ultra VIX Short Term Futures ETF (Ticker: UVXY) puts midday yesterday. We are looking for VIX to relax somewhat after today.
-
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 looking for a bounce back near 470 yesterday. It is looking more realistic today.
Trading Legion:
The Trading Legion is an intermediate-level education and a long strangle/calendar trading vehicle. The goal is to teach students the best times to buy options.
I bought an Invesco Currency Shares Euro Trust (FXE) strangle that is moving back the right way.
Here is the replay if you missed it.
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 Cboe Volatility Index (VIX) future decay to pay for upside iPath Series B S&P 500 short-term VIX futures ETN (VXX) and Pro Shares Trust Ultra VIX Short Term Futures ETF (UVXY) options.
The Option Pit VIX Light Is Moving And Still Yellow. There might be some action today after Biden’s Omicron announcement.
Mark added UVXY puts for the December cycle.
I added a VIX strangle, buying the VIX Jan. 19 20-strike puts and Jan. 19 25/35/45 call butterflies.
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