This is the video recording of September 24th 2021 Weekly Jam Session with Sean McLaughlin.
[Options Premium] Making Money By Hand
The ASC team did their monthly conference call this week, where they rip though a million charts and highlight the things we need to pay attention to — the trends, the divergences, and particular setups in stocks that we like.
The blizzard of information they throw at us can be overwhelming at times. This is why you come to me to cull through it all and find my favorite setups that can be played with options.
Today’s pick comes out of that call and its focused on the small business side of things.
The Return of High Beta?
More Of The Same
From the desk of Steve Strazza @Sstrazza and Grant Hawkridge @granthawkridge
Considering the selling pressure in recent weeks, we were very excited to take a look at our breadth indicators today to see if we finally saw some downside expansion worth pointing out. Spoiler alert: There was nothing there.
Being as we’re in a sideways market, we’re always on the lookout for a change in character in internals that might suggest some resolutions are finally on the horizon. And since bears have been driving stocks lower since early this month, our focus is on new short-term lows.
With the S&P experiencing some volatility and revisiting its 50-day moving average this week, did we finally get that “fall day?”
Two things we’ve been hitting on ad nauseam for over a quarter now are the consistent lack of new lows and the fact that most stocks have already corrected beneath the surface.
Today, we’re going to revisit both of these key themes and see where we currently stand.
Bitcoin’s Bear Trap
Is this it?
Are the bears trapped, and now we rally on higher?
As we’ve said for those with shorter-term time horizons, there’s nothing wrong with taking a swing if Bitcoin’s above these lows.
The bears in the derivs are growing too, with funding rates across all exchanges falling back into the negative territory despite Bitcoin’s recovery into the day. [Read more…]
[Video] Options Trade of the Week w/ Sean & Strazza | Neutral Russel 2000 $IWM
On September 22nd, Sean and Strazza hopped on a Twitter Live Stream to discuss a recent trade idea for All Star Charts Options Members.
Here’s the play:
“I like an $IWM November 200/205/235/240 Iron Condor for an approximately $1.80 credit. This means I’ll be short the 205 puts and 235 calls, while protected by the 200 puts and the 240 calls. This is a defined risk trade where the most I can lose is the maximum possible value of the spread (distance between short and long strikes — $5.00) minus the credit we receive at initiation ($1.80) which equals $3.20.”
To learn more about the trade and the thinking behind it, click below to watch a replay of the Live Stream. [Read more…]
[Options] Fading Index Volatility
With volatility rising this week, I’ve been on the hunt for opportunities to “safely” sell some premium.
While there is no such thing as a sure bet in the markets, selling elevated premium in rangebound securities is one of the closest things we will find to that idea.
I was chatting with my partner Steve Strazza this morning and when I told him what I was looking for, he immediately responded: “Oh — you want $IWM. That is the very definition of sideways action.”
Sure enough, he’s right. And upon closer inspection of the options chains, there is some good premium offered for sale if we’re willing to go a little further out in time.
Will Investors Turn to the Yen?
From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
In recent weeks, the market has taken a risk-off tone as dollar-denominated risk assets have come under increasing pressure.
Major US stock indexes have pulled back, and procyclical commodities such as crude oil and copper continue to chop around beneath overhead supply.
Interestingly, we haven’t seen much of a bid in defensive assets through the recent bout of downside volatility. US treasuries have been relatively quiet, and the dollar remains below its August highs. Meanwhile, bond-proxy sectors like Utilities and Staples continue to make new relative lows.
None of this suggests the kind of defensive positioning that would be typical in an environment where risk assets are getting hit.
But what about one of the most significant safe-haven assets of all… the Yen?
Let’s take a look at how the Japanese Yen is setting up against other major currencies right now and what it could mean for the market at large.
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