Yo Pit Crazies,
Sitting here just now, I realized how much kryptonite sounds like cryptocurrency.
Of course, they act a little differently.
One of them can put down Superman, while the other is acting like Superman.
The cryptos are pretty much leaping tall buildings in a single bound at this point. Although Bitcoin received a knock yesterday after “tech issues” sullied its launch as legal tender in El Salvador.
But, hey, the Man of Steel took his lumps from time to time. BTC et al. will bounce back.
Now, there is another strong element that Frank Gregory has been on for some time — namely uranium and uranium miners.
Demand is up. Supply is strangely down. The price is skyrocketing lately.
Let’s look at volume in one of the hotter stocks …
Frank Says the Uranium Is Too Hot
My question is: if selling a put generates a 10% return, is that still for real if the puts are only .20?
Plain as day, one can sell an at-the-money put at $.20 for a better than 10% return getting put in Denison Mines Corp. (DNN).
DNN Oct. 15 option volume
I have to say, from a risk-reward point of view I like selling the 1.5 puts for $.20 since that is better than the $1.40 I paid for the stock.
The issue with DNN is that it is a long-term play.
DNN 1 year stock chart
I think Frank is right that uranium and nuclear energy will be a replacement for oil and gas in the future.
Writing some puts is not a bad idea or, at $1.50, the stock is pretty cheap. Frank first mentioned DNN several months ago when the stock was $1.
The Lesson: Sometimes it is hard to bridge the gap between long-term thesis and short-term trade. Just make sure you are happy with what you have.
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.
- No closing action today, but look for my next trade idea Wednesday.
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.
AAPL and Uranium stocks were on the Pro minds yesterday for uber-bullish sentiment. AAPL seems like it wants to take over the market and get to $160.
I closed my Apple Inc. (Ticker: AAPL) spread. In at $1.94 and out at $3.95. So, Roomie Trevor, who came with me, had a good day with a nice 100% gain there.
Each week, Option Pit CEO Mark Sebastian looks for low-volatility, mid-term duration call buying and put buying opportunities.
- Mark closed 2 of 2 AAPL Sept. 17 155-strike calls at $2.75 for a 76% gain. That’s four winners closed in a row. Party on, Wayne!
Option Pit CEO Mark Sebastian uses the Robinhood Gamma Radar to find order flow in active names.
- AMC Entertainment (Ticker: AMC) puts were closed for a loss but Mark is riding some Zynga Inc calls that look promising. First loss in while for RHT.
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.
- Cat in the Pro Room took Bill Griffo’s Trading Legion idea on Thursday on iShares Long Term 20+ Year Bond ETF (Ticker: TLT) and sold-to-close half of her puts for +80%.
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, but VIX showed some signs of life as SPX drifted to 4,500. The selloff was short lived.
I tried to close some VTC Trade No. 259 SPY put flies today for a 25% gain but SPY stopped dead and was not able to exit. Marking a 15% gain into the close.
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,