@Somadis you can simply buy a long put spread. Say, assuming SHLD is still ~ $9.50, you would buy a SHLD Jun17 9.50/7.50 put spread. Depending on how aggressive you feel you can structure the spread to be more in the money (cost more, higher probability of profit) or more out of the money (cost less).
Of course you must know that if SHLD moves up or stays above $9.50, you will likely lose most of the investment used to purchase the spread.
Income with Options
I like your idea. Though JWN has sat in high thirties last year and seems like that can happen this year as well. Unless retail sentiment improves somehow.
PS: I hate it when exchanges have to adjust option strike prices, like in JWN case. Those odd strike options will become very illiquid later.
VFC a dividend aristocrat that has announced earnings and is down ~ 5%. This may be a good time to go long. VFC is a holding company that owns many iconic clothing brands and the business is very stable. It pays +3% dividend at current prices and has a large stock buyback going. I am long and increased my position 30% this morning. For me this stock qualifies for a core position. I am not making comments on the immediate technical direction. It might just go down some more. This is for the long term capital gains and dividend income.
Option Hedging Strategies
Hedging is the practice of holding securities or investment positions in order to reduce damage that might be a result in a volatile market. There are many hedging strategies that an investor can use in order to reduce risk in volatile times. These Securities that offer hedge are securities that move against the current of the market trends. With that here are the most common hedging strategies that an investor may use.
@jonescd Search this forum for the word "earnings". Actually we should have a tag for that... Good idea. Perhaps we should put together a thread that collects the most useful earnings trades anyone?
A VIX research paper from two University of Texas researchers states - a quirk leaves the volatility market vulnerable to a sophisticated trade involving pushing around the prices of underlying S&P 500 options in order to manipulate the value of VIX derivatives as they settle.
"This market is fairly unique because you’ve got a very liquid market that’s settling based on the price of a less liquid options market,” says one of the authors.
A hypothetical example: A trader long $2M of VIX futures, wanting to push prices higher prior to settlement, could spend $1M overpaying for S&P 500 options at the settlement auction, driving up the price of the contracts used to calculate the VIX. Any money lost on the S&P options trade would be gained doubly by the VIX derivatives (where twice as much are owned).
The CBOE says the work is based on "fundamental misunderstandings."
The mysterious volatility buyer or buyers dubbed “50 Cent” because of their propensity for buying large blocks of VIX call options priced at roughly a half-dollar each, had their best day of 2017 on Wednesday. The CBOE Volatility Index, commonly known as the VIX or fear index, surged by nearly five points on Wednesday to 15.59, its biggest jump since Sept. 9.
“Depending on how 50 Cent has structured the hedge, may never actually monetize the position, simply continuing to roll the VIX calls and enjoying the mark-to-market gains during times of turbulence,” Chintawongvanich wrote in a note to clients Thursday. “However, if they do intend to monetize at some point, we think they require a much larger move in VIX futures than we have seen so far (we would think at least until June future trade 20+).”
Options Tools | Options Brokers
@OPRAnut cool stuff. I did not know.
Commodity Options and Futures
Just like with the stock market, trading volumes in oil were also lower. Only about 183,000 WTI contracts and 103,000 Brent futures contracts changed hands, almost 70 percent lower than the trading volume on Thursday. Europe focused on the on-going geopolitical tension given that the financial markets were shut across the region for Easter holiday.
A country’s economy relies heavily on the production, distribution, consumption and trade of goods and service from different players and sectors. Resources are managed by different economic agents such as individuals, governments and the businesses in order to sustain life to the wealth of the country. If there is one driver that is very essential to the growth and development of a country, it is commodity trading - an activity that has been accommodating the economy for more than thousands of years.
F.A.Q. | Announcements
Happy trading to everyone
The FOMC holds eight regularly scheduled meetings during the year and other meetings as needed. Links to policy statements and minutes are in the calendars below. The minutes of regularly scheduled meetings are released three weeks after the date of the policy decision. Committee membership changes at the first regularly scheduled meeting of the year.
@OPRAnut Thanks for posting! I know e can rely on you to keep us updated on all regulatory stuff. Happy holidays to you !
Still Institutional investors are better informed then crowd. Recent example is the last job report - institutional were buying one day before the job report while the crowd was selling http://www.spreadvectors.com: