verticalized verticals

[.sigma]

 

[.sigma]

The body looks to be at 13 delta, suggesting you are quite bullish. With a IV percentage of around 10, might a long call a reasonable consideration here?

anyway, check out the logic:

Bullish yes, usually volare lowers when spot rises especially in single-name equity. So why not position a fly with a bullish bias rather than a bearish bias (spot decreasing = higher volare).

Lets say you play a bearish fly. Spot regresses to your intended strike, but volare rises thus your fly might get cheaper even tho spot is near your body. Idk I haven’t traded these enough and studied them enough to come to a resultant, but it seems it would be more beneficial to play the bull fly.

one more thing: prior to positioning the bull fly, volare most likely will be in the higher percentile because of a correction/sell off... hence why I’m playing for a bullish case (contrarian)

 

[BeautifulStranger]

anyway, check out the logic:

Bullish yes, usually volare lowers when spot rises especially in single-name equity. So why not position a fly with a bullish bias rather than a bearish bias (spot decreasing = higher volare).

Lets say you play a bearish fly. Spot regresses to your intended strike, but volare rises thus your fly might get cheaper even tho spot is near your body. Idk I haven’t traded these enough and studied them enough to come to a resultant, but it seems it would be more beneficial to play the bull fly.

one more thing: prior to positioning the bull fly, volare most likely will be in the higher percentile because of a correction/sell off... hence why I’m playing for a bullish case (contrarian)

On most single names, I associate significant rallies with increasing volatility, especially with long term trend changes. Consider charting IV along with price of the underlyings you are interested in to see possible correlation between IV changes and moves of the underlying. An example below:

As can be seen from the above chart, IV does not always maintain a set correlation with stock prices, which is suggestive of other inputs being needed when attempting to predict changes in volatility for use in constructing more efficient trades structures. I believe one of the other inputs is age of trend.

 

[.sigma]

Using TSLA as an example is cheating! Lol

 

[.sigma]

Interesting excerpt from Euan Sinclair’s book “Option Trading: Pricing and Vol Strategies” on plotting volare as a f(x) of delta.

 

[.sigma]

 

[caroy]

anyway, check out the logic:

Bullish yes, usually volare lowers when spot rises especially in single-name equity. So why not position a fly with a bullish bias rather than a bearish bias (spot decreasing = higher volare).

Lets say you play a bearish fly. Spot regresses to your intended strike, but volare rises thus your fly might get cheaper even tho spot is near your body. Idk I haven’t traded these enough and studied them enough to come to a resultant, but it seems it would be more beneficial to play the bull fly.

one more thing: prior to positioning the bull fly, volare most likely will be in the higher percentile because of a correction/sell off... hence why I’m playing for a bullish case (contrarian)

Thinking you're onto something with a natural bull bias for the butterfly with the vol contraction on the way up.

 

[.sigma]

Thinking you're onto something with a natural bull bias for the butterfly with the vol contraction on the way up.

yeah ZM and BBY were perfect candidates for this. I’m going to start noting exact vol levels when I enter and exit and see how much contraction occurs over the duration of the trade!

 

[.sigma]

This week is looking light.

Eyeing the AMD 22 JAN 21 89/92/95 classical call @ 0.45 risk

Earnings is next week (January 26th)

 

[.sigma]

I’m so upset. All my stocks go up it’s ridiculous! Especially when I realize profits!

I’m still in AMC, BEST, BXRX. Liquidated the rest alll for profit!

QTT is amazing. Great trade, but I really could’ve sucked more juice out of this one (PAUSE/NOHOMO). BXRX looks like it’s going to heavens gates!

as far as my fly trades. I’m still in CRM and VZ.

Today CRM popped up finally (expected move)

22 JAN 21 220/30/40 @ 1.95, it’s now currently quoting 3.53. Most likely closing this tomorrow.

VZ is sitting directly on the 200ma, remember I bought the 22 JAN 21 54/58/62 calls @ 2.68, currently quoted at 3.16.. still holding