All Star Options Articles

A little pullback in stocks today has opened up the window for us to sell some options premium as a nice portfolio hedge for our predominantly long portfolio.

We don't need a long preamble here. The plan is simple: I'm going to enter a delta-neutral credit spread in an ETF that is currently atop my list of ETFs sorted by implied volatility.

Earlier this week, we took our original risk capital out of our Micron Technologies $MU position, and now we're enjoying a #FreeRide into the summer.

We've got a somewhat more conservative bullish bet going in Analog Devices $ADI via a call calendar spread.

As you can see, we've already got exposure to the semiconductors space. But there is a ton of bullish action here so as long as it keeps working, we're going to wade a little deeper in the semis pool for our next trade. 

The Bull has been rolling. Have you noticed? Judging by the response I got from an innocent little bullish tweet last week during the midst of a mild pullback for stocks, you'd think I'm insane for thinking stocks have a chance to go up.

So many angry people looking for lower prices.

Maybe they'll be right someday? Chances aren't zero.

Meanwhile, I'll just keep paying attention to price and relative strength which is an excellent guide to point me into winning trades in any direction.

So for today's trade, we're going to ignore the digital assaults on our senses by the angry bears and get analog in our approach to riding this bullish wave.

Me and Strazza did The Flow show earlier in the week, and one of the names we discussed as being a possible trade to get into has finally popped its head above the trigger I was waiting for.

This one has the potential to be a quick mover, so let's get right to it!

No doubt Gold Bugs have been enjoying the price action in gold instruments recently. It has been a profitable few months to be long just about anything shiny -- even silver!

The All Star Charts research team published a continued bullish piece on the sector today.

Today's options trade is a conservative bet on a continuation of this pattern. Let's get right to it.

The latest Young Aristocrats report is out, highlighting companies with steady and increasing dividends that are also displaying strong relative strength -- a powerful combination. These are some of my favorite stocks to get long when the conditions warrant.

Today's trade is in a sporting goods retailer that just broke out and looks like it's ready to start sprinting.

Consumer Staples continue to be one of the leading sectors as we head into year-end. And if you know anything about the gang here at All Star Charts, we love to be long stocks and sectors that are showing strong relative strength.

So for our last new trade for 2022, we're going to take a big swig of an energy drink maker.

The bottom line is that the bottom is in for these stocks. The evidence continues to build in the bulls’ favor.

~ @sstrazza

Starting off with fire! We're not mincing words here.

But I'm not going to steal any of Strazza's fire. Head here to read his piece on what's going on with Chinese stocks. It sets the stage beautifully for today's trade.

Caught up? Great, let's get into it.

At this point, it is almost becoming a cliche. But whenever the market sells off and Berkshire Hathaway takes a dip, it's almost becoming money in the bank to sell puts.

It's already worked for us numerous times this year. This won't work forever, of course, but until it stops working we should keep giving it a go.

With this in mind, let's get to work.

We've currently only got one delta-neutral "income" trade on the books right now, but that one will be coming off sometime this week as it is comprised of December options which expire this Friday.

In a perfect world, I always prefer to have a least some delta-neutral short premium exposure in the portfolio to help us compensate for any sideways chop that the markets might serve up to our existing directional bets. It's a a nice portfolio diversifier.

With this in mind, today's trade will be in an ETF that is currently trading smack-dab in the middle of a four month range that I expect will hold for a least a few more weeks. 

The Brothers Warner can't seem to get out of their own way. At least, that's what the price of Warner Brothers Discovery stock $WBD is telling us.

Look at this dog:

And recently, we've seen some aggressive put buyers step into the fray, as was discussed in a recent Follow the Flow Report. Here's what Strazza had to say about it:

No matter what the market, geopolitics, weather, congress, The President, retail demand, the news cycle, or even the price of the commodity itself throws at oil stocks, they just... keep... winning.

These are not trends I like to fight.

And it seems options markets aren't willing to fight it either as today's trade is in an oil sector bellwether that is now pricing in the lowest volatility in over 9 months as the stock flirts with post-Covid highs.