I am thinking about doing the July 17/18 call spread for a debit of around 0.25
This could be a good play if you think the market is going to correct within the next 2 months.
The max profit of 300% provides an interesting opportunity. Even if you are wrong on your first 2 attempts and end up as complete losses, if your 3rd attempt is successful, you would recover the losses from your first 2 attempts and still make a profit.
The low on Feb 3, 2016 was a 5.7% decline from the previous day's close.
Today's low of 715.11 is also a 5.7% decline from the previous day's close.
GOOG had continued down for 3 more days after the Feb 3 decline. However, this was during the market correction so it may be different this time.
I had watched the "Playboy's Roller Disco & Pajama Party" back in 1979 when it first came out. You can watch it now on YouTube. Bill Cosby is in this video. Hef had stated that he liked to have Bill Cosby, who is one of his best friends, to hang out with him at the mansion.
Now why would any man want to hang out at the Playboy mansion???
I generally do not buy out of the money short term calls because of the higher risk. I am like you with $12 open calls and call spreads. I am deciding about adding to my position. A more conservative play at this price level would maybe do a Sept 13/15 call spread for a debit of 1.28 Your breakeven would be with BAC at 14.28 Max profit would be just over 50%.
With NFLX at 96, the Sept 85/95 call spread could be bought for around 6.15
Breakeven price of 91.15
A max profit of 62%
Minimal drawdown should NFLX collapse to the 80s.
Are you doing call spreads, either short or long term? With VXX at 15.90, I see where the Sept 17/18 call spread could be bought for around 0.25 This would give you a max potential profit of 300% I am thinking about doing this as a hedge for my long market positions.
On of the analysts on CNBC today is predicting a DOW of 20k by year end.
If the market can make a new high on this leg up, 20k would appear to be a reasonable target.
Today's call/put ratio for UVXY is 2.55 to 1.00
If anyone is buying calls, take a look at the spreads. The May 20, 14/18 call spread can be bought for less than 2.00 with UVXY at 18.02
"Allergan price target lowered to $265-$270 from $345-$350 at Wells Fargo
Wells Fargo cut its price target on Allergan (AGN) after the U.S. Treasury proposed regulations limiting corporate inversions. The firm says that the new regulations could put Allergan's merger with Pfizer (PFE) at risk. However, the firm says that if the deal does fall apart, Allergan will have "strong earnings growth, a great pipeline...and a solid balance sheet" in the wake of its deal with Teva (TEVA). Wells adds that the news will probably "weigh on sentiment" for the entire pharmaceuticals sector. However, it keeps an Outperform rating on Allergan"
I went to a Chipotle in Northern Virginia today at 1:30 The line extended to the entrance door(around 30 people). I was a bit surprised since there were only around a dozen in line 2 weeks ago. But that was around 3:30 last time so that may explain the difference. But it does appear that customers are beginning to return. Since this is partly a psychological hurdle they have to overcome, perhaps they should try to change their appearance. A simple and cheap change such as just going from black to white T-shirts could be a start to change their image. The customers need something to visualize what has changed. The idea is to give the restaurant a cleaner image which could convey the concept of cleaner food.
Today's retest of yesterday's 25.75 low was perfect. Today's price action is also similar to Mar 21.
Are you planning to sell at 33? If so, have you thought of just selling short the July 25 puts and collect around 6 in premium? If VRX were to just stay at this price level, you would not make any money holding shares. However, you would keep the full option premium as long as it is above 25. You could also buy some lower strike puts such as the July 10 for disaster insurance in case of bankruptcy.
773 traded today with an open interest of 22,868.
There is also active buying of the Jan2018, 80 calls.
If you notice, oil had bottomed in Feb 2009 and also in Feb 2016. A 30 year seasonality chart will show that Feb happens to be the month when oil is at it's lowest price for the year. The chart also shows the price of oil peaking around Sept-Oct. I would like for it to drop to the low 9s to start trading it again.
It looks like traders may be hedging their market position with UVXY. The open interest call/put ratio for SPY is 1 : 2. There are more than 2 puts for every 1 call. I would be more concerned for the market if there were 2 calls for every 1 put. Also, the cash position for fund managers are at a high level. There is probably a lot of portfolio re-balancing going into the end of the quarter. The managers may be worried about risk of the market moving to the upside while being in a large cash position.
There is always the risk that contango will turn into backwardation, where the nearby months are higher than the further out months.
In 2013, when the near month August 2013 contract settled at $108.22 per barrel, the July 2014 contract which was 11 month out, closed at just $95.56.
Did you end up covering your short puts or just let the shares be put to you? This happened to me with USO when I was selling puts. I held on to the position too long and ended up having shares put to me at 10.00 I continued selling puts as the price dropped so I was able to balance out the loss in my shares. But do this only if you are sure the stock has reached a bottom.
Excellent call! Looks like the bottom is in.
The previous major low was on Feb 19, 2009. Must be something about Feb to cause the lows in oil.