Options

SPX Offers Potential 39% Return For Bearish Traders

The S&P 500 (SPX) has taken a bit of a beating recently and (so far at least) Santa Claus has not come to town. One trading opportunity for those traders with a bearish bias over the next week or so is a Bear Call Spread using the 2000 strike as the short call and the 2025 strike as the long call. As of Tuesday’s close, this trade offered a roughly

The Best Of See It Market – November 2014

November was a great month for See It Market. We added 3 fantastic contributors (Ben Carlson, Dave Budge, and Jonathan Beck) and saw our output jump by 20 percent and our traffic by over 30 percent. Thank you to our contributors:  We have such a great team of active investors providing boots on the ground insights and high quality research. I hope you will take a few moments to review some

Is Netflix Stock (NFLX) Ready To Explode Again?

Netflix stock has long been a favorite with option traders due to its high stock price, high implied volatility and explosive stock moves. But following the severe selloff in mid-October, Netflix (NFLX) has been very subdued. Since October 23rd, Netflix stock as traded in a very tight range between $374.60 and $395.52. That’s only a range of 5.5% in the last month for a stock that has a history of moving

The Best Of ‘See It Market’ – October 2014

Yup, October was a wild month. And we were all over the action… even before it started. Fellow SIM contributor Ryan Detrick’s September 29th post on “Why October May Be A Roller Coaster Ride” gave readers a glimpse of what was to come. And it was all that and more. From the mid-month lows to the end of month highs, the market jumped over 10 percent (in two weeks). If you haven’t

Market Masters: How To Manage An Iron Condor Trade

For many professional option traders, iron condors form the basis of how they generate monthly income. Iron condors are a strategy that allows you to profit from sideways moving stocks, but they can also profit if the stock experiences slightly higher or slightly lower prices over the course of the trade. Where beginners get in to trouble is when a stock makes a big move in either direction shortly after

2 Charts Revisited: The Put Call Ratio And VIX Term Structure

Back on October 7, I wrote this piece that focused on two bearish indicators and I said we could see some near-term weakness in the market. After a quick 4% drop in a week, we bounced and formed a nice looking V-bottom. Check out this chart of the S&P 500 (SPX):   I said at the time that I wanted to see both the CBOE options equity put/call ratio and

Market Masters: Using COT Data To Identify Turning Points In The Market

While I’ve been writing for See It Market for several months, it’s a great honor to write a “Market Masters” article. With my focus being towards technical analysis I am constantly watching the latest price action and in search of the best risk/reward relationships. These can be derived from momentum or breadth setups, which I’ve written about quite a bit, extremes in market sentiment, as well as within the actual positions

Big Moves Expected in Brazil ETF (EWZ)

The ishares Brazil ETF (EWZ) has a 30 day implied volatility of 70%. This means that the options market is pricing in a move of plus or minus 20% on EWZ within the next month. The precise calculation to find the expected move based on the IV30 percentage is (IV30/sqrt12) ~ (70/3.464) = 20.2%. Recent news surrounding the Brazil elections is obviously casting uncertainty on the Brazil stock market. Looking at the

Investors Panic As Volatility Spikes: What’s Next For Stocks?

It’s been over 2 years since investors experienced a day like Wednesday. The steady stream of measured selling finally gave way to a bit of fear and capitulation as investors were forced to make decisions in the face of market volatility that felt crashy. At one point, the S&P 500 was down over 3 percent. It was the perfect series of events for an uncertain market: A gap lower that looked

Why October OpEx Could Bring A Bounce For Stocks

After the first three week losing streak for the $&P 500 (SPX) since January and the first six week losing streak for the Russell 2000 (RUT) in more than nine years, bulls are looking for any reason a bounce might happen. Well, this could be the ticket: October OpEx. This week is October options expiration week, otherwise known as October OpEx. Last month, I showed why September OpEx was historically