[9/7: updated stop to 48. We’re already #FreeRiding here, so whatever we sell the remaining portion of the position for is pure profit!]

According to “the news,” Americans can’t afford to buy homes and rising mortgage costs will only deepen the problem.

Cool story, bro.

Do you know what disagrees? The price of virtually every publicly traded homebuilding company. We’re already long Lennar and Toll Brothers which continue to work for us.

Next up is KB Homes $KBH, which appears to be on the verge of a big breakout following a welcome response to its recent earnings report.

[Read more…]

If you’ve tuned in to either of my “Expiring Daily” Twitter spaces talks over the past two Mondays, you’ve heard me talking about a trading strategy I’m currently in the process of iterating that involves daily expiring options in the S&P 500 options complex ($SPY and $SPX options, specifically).

A thoughtful listener sent me an email with a bunch of questions about it, and I thought my answers to him might be enlightening to some of you who may be tinkering with strategy construction, particularly with short-dated, high-gamma options.

As I told the emailer, I can answer questions as of my thinking RIGHT NOW. But please know this is a work-in-process, and I’m continually tweaking my entry/exit/adjustment parameters as I learn more.

Here was our conversation: [Read more…]