Yo Pit Crazies,
The Ukraine mess is turning into a stalemate.
Both sides are digging in. And if the Russians want the Ukraine, they can’t blow it up first.
Pipelines, homes, wheat fields. Vladimir Putin didn’t think he’d have to go scorched earth.
It’s a bad situation and the markets, after brief euphoria at the end of last week, are starting to get the picture.
Sanctions and embargoes will touch every sector of the economy.
That’s no bueno.
Markets are getting shaky. Here’s what it means for you …
The Bid for Volatility Is Consistent Again
The issue now is liquidity and volatility.
Almost everything seems to be up in the air at this point.
I tried buying a lot of options yesterday, but only had marginal success.
As a floor trader during past wars and upheavals, I was in no hurry to do a broker a favor.
That means liquidity for the retail public will get thinner.
A conversation would go like this:
The Broker: What is an ⅛ among friends?
Me: Pay up, @%^&!.
Ah, the good old days.
Expect continued weakness as things are now moving in the same direction with the threat of a pop in the S&P 500 (SPX). That’s a recipe for a very high number in VIX.
I did take some upside profits yesterday in VIX because I needed to as my VIX puts are trash.
At this rate a 40 in the fear index seems likely.
The Rundown
Capitol Gains w/ Frank Gregory
I was able to sell some Ford Motor Company (Ticker: F) puts and am now holding the upside calls for about even. I could use the $18.45 F hit last Friday.
Power Income Trader
Bill and I are long the Northshore Global Uranium Trust ETF (Ticker: URNM) and it is almost to the short strike of my call butterfly. The liquidity in the name is horrible and this market is making it worse, but the trade is marking up 20%.
Bill’s Palantir Technologies Inc. (Ticker: PLTR) play will most likely get called away.
Nitro Trader:
Option Pit CEO Mark Sebastian uses a formerly private strategy for trades that can profit in either direction.
Mark closed the SPDR Dow Jones Industrial ETF (Ticker: DIA) leg of his first Nitro Trade for 41% gain.
Option Shopper:
Licia Leslie bought QuantumScape Corp (Ticker: QS), so the Shopper and the Cap Gainer are looking for a pop here. QS holding up well today with the other Alt Energy stocks.
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 active with Mark calling the ball on a short delta put butterfly in SPX for a near one-day double.
Big Money Flow:
Mark closed 80% of Cleveland Cliffs LLC (Ticker: CLF) calls for and will ride the balance for a credit.
Volatility Edge & Volatility Trading Club:
The Option Pit VIX Light Is Green, as the market for VIX futures is in full backwardation. SPX is inching to 40%.
In the VTC I closed the last of my upside call spreads in Trade No. 283 leaving me with a credit overall for the puts I own.
To Your Trading Success,
AG