THE WEEK AHEAD: FRENCH ELECTIONS AND THE VIX; AA, X, and UA
With the French primaries in the rear view mirror and some market unease abated due to the result, VIX futures are caving hard as of the writing of this post (the May contract is down 8% to 13.15). This, unfortunately, changes the potential complexion of next week's market for me, since it is likely that implied volatility will dry up somewhat in SPY/SPX and RUT/IWM, making selling premium in them less productive than it would have been at Friday close. Oh, well. You take what the market gives you ... .
With earnings season in full swing, we've got a lot of stuff announcing next week, but not everything is playable or worthwhile from a premium selling standpoint.
Right now, I'm focused on three underlyings which have something approaching the right metrics I'm looking for in these plays (>70 implied volatility rank/>50 implied volatility): AA, which announces on Monday after market close; X, which announces Tuesday after market; and UA, which announces Thursday before market. As we get closer to those announcements (and I've got live market data to work with), I'll post setups for those if they look good enough for plays from a dollar and cents and liquidity standpoint. Last time I looked at a AA setup, for example, I wasn't happy with what I saw for a bid/ask in the expiry I wanted to use for the play ... .
With exchange traded funds, nothing is looking particularly "sexy" here, and it's likely to look even less sexy at NY open, since a low VIX invariably permeates the entire market. That being said, XOP does approach my metrics for a play, although I'm already in a put diagonal that will require some attention and may lead me to beg off putting on some more, since I don't want to have a new setup get in the way of any rolls I need to do.
With earnings season in full swing, we've got a lot of stuff announcing next week, but not everything is playable or worthwhile from a premium selling standpoint.
Right now, I'm focused on three underlyings which have something approaching the right metrics I'm looking for in these plays (>70 implied volatility rank/>50 implied volatility): AA, which announces on Monday after market close; X, which announces Tuesday after market; and UA, which announces Thursday before market. As we get closer to those announcements (and I've got live market data to work with), I'll post setups for those if they look good enough for plays from a dollar and cents and liquidity standpoint. Last time I looked at a AA setup, for example, I wasn't happy with what I saw for a bid/ask in the expiry I wanted to use for the play ... .
With exchange traded funds, nothing is looking particularly "sexy" here, and it's likely to look even less sexy at NY open, since a low VIX invariably permeates the entire market. That being said, XOP does approach my metrics for a play, although I'm already in a put diagonal that will require some attention and may lead me to beg off putting on some more, since I don't want to have a new setup get in the way of any rolls I need to do.
Commentaire:
Oy. VIX uber crush to sub-12. In a flash, index exchange-traded fund premium selling looks "unsexy." Will see tomorrow as the market digests the Frenchie a bit ... .
Commentaire:
There may be vol in GDX, GDXJ due to gold movement, so that may be worth a look. Similarly, TLT may crush in at open, boosting its IV and therefore its attractiveness for preem selling.