Thursday, January 9, 2014

Hints for More Oppurtunity

2013 was a really tough year for traders, specifically strategic traders. The markets did almost nothing but go up, and we had no volatility. We only had a few days where the VIX went above it annual mean in the last year. An environment like that gives us very little opportunity as traders. It was very difficult to take advantage of volatility because it rarely became overextended and direction is hard to deal with all by itself. However, I am starting to see some more opportunity on the board. I have scrolled through many stocks on my platform, and slowly the volatility ticks up more and more. I think we are going to see some volatility expansion very soon, and we will likely see a sell off in the ES. My position has become short delta, but I am still making money almost every day this year. That is weird. However, that might be a reflection on some of the opportunity out their. I am been seeing some very interesting premium crushes. The main stock I am watching is TWTR. It is a relatively new stock so the volatility is pumped. My general game plan is to be short volatility while getting slightly short or long delta considering the move. If TWTR falls a bit I am long some delta (At the current time selling some weekly put spreads), or if TWTR goes up a bit I will be selling call spreads. At the moment, I am short weekly put spreads, short call spreads in the front month, and short an iron condor. This stock will only have such pumped vol for a few more week, so take advantage of the opportunity available. Otherwise, I am short delta, short premium, and long index volatility (Vix is an example). The only really interesting stocks/markets right now are CMCSA, MSFT, and DOW. Sell some premium in these, stay small, but remember there is some new volatility opportunities starting to come in; therefore, be watching and be careful with earnings.

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