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Short strangles on stocks
- Thread starter falcon
- Start date
I don't think you will find what your looking for as there aren't any ETFs that are priced low with options that are liquid which also contain uncorrelated stocks within it. You would be better off reducing your criteria to an ETF with liquid options thats from a sector that is less volatile than others like XLP or XLU
I feel like almost everything these days are tied together, meaning they are all correlated to some degree. Before you bash that I understand some things aren't correlated and are used to hedge and you can have inverse etf's etc etc. But for the vast majority of things, many are correlated at the moment. I feel like your best bet would be finding stocks that have very low volatility. There are some out there that don't have a wide trading range even when the market is getting killed (or rallying 490 points).
As for finding a proper screener, if you're using a retail account, which I'll have to assume you are, and they do not have one that properly fits your criteria, why don't you explore using a different broker? Many firms now offer trading platforms whether they're free or have a min. trading amount, but they still have them.
As for finding a proper screener, if you're using a retail account, which I'll have to assume you are, and they do not have one that properly fits your criteria, why don't you explore using a different broker? Many firms now offer trading platforms whether they're free or have a min. trading amount, but they still have them.
finding individual stocks like defensive ones that won't get killed when the rest of the market does probably exist, however you are at the risk of that individual stock getting bought out or some bad news. Guess thats why you won't a whole bunch of em to offset that risk, an ETF would be your best bet.
Good luck finding one.
Good luck finding one.
Most stocks drop when the market falls so I think you're chasing unicorns.Quote from falcon:
Thats correct. The more uncorrelated the better and preferably from different asset classes, however they all need to be able to handle a market fall. Any takers?
Not that it matters but I still have no clue what you're after. IMHO, if you're looking to hedge yourself in a pairs situation, I'd look for high not low correlation since they're going up or going down together. Then, you can work the spread b/t the two equities and other than stock specific news (EA, takeover, etc.), you'll have lower market risk.
I'm looking for a bunch of stocks that have low vol and are low priced which will stay in a range so I can apply a short strangle strategy on them. If they are uncorrelated from different sectors than some will perform better than others as the market moves, but overall they all need to survive a market crash. An ETF would be suitable but one doesn't seem to exit.
Quote from falcon:
I'm looking for a bunch of stocks that have low vol and are low priced which will stay in a range so I can apply a short strangle strategy on them.
These two math formulas might help:
Low Priced + Trading Range = Low Premiums
Low Premiums + Break Out From Trading Range = Huge Loss
Quote from falcon:
not if your willing to dynamically hedge as you go.
Dynamically Hedge. Never heard that term before, sounds expensive. Dynamic is something that changes constantly so would this mean buying/selling as the market changes?
Is this math formula correct? Dynamically Hedge = Account Churning