All Star Options Articles

In today's Flow Show, Steve Strazza and I discuss what feels like the birth of a new leg higher for this ongoing, but recently struggling bull market.

And while I was lamenting the performance of $AAPL lately, Steve showed me the mirror opposite: $AMZN.

Watch this video to see how we arrived at today's trade, and see the details below: 

Here's the Play:

I like buying an $AMZN June 250/300 Bull Call Spread for an approximately $9.65 net debit. This means I'll buy the June 250 calls and sell an equal amount of the 300 calls. And this debit I pay today represents the most I can lose if I'm dead wrong:

Amazon has earnings coming up on Thursday, February 6th. I'm mindful of this, in fact, I think it could be the catalyst that shoots this stock higher. But if I'm wrong, my risks are defined to the debit I paid.

For risk management purposes, I'll exit this spread if either one of the following conditions is met:

1. $AMZN sees a closing price below $215 at any time during my hold. Or,

2. The value of this spread...

A stock featured in a recent Junior Hall of Famers report has triggered an entry today, and it has a lot of room to run.

Earnings are on the horizon, but we'll play this stock with a defined-risk spread that takes a little of the sting out of the options' cost while giving us the ability to participate in upside follow-through should we get it. 

One of my junior analysts (Rick! He's the Man!) brought a stock to my attention that is in an attractive sector that could fly under the right conditions. 

Add to this that there is a high short interest and there is "meme" stock potential, and this could really be an upside portfolio-buster for us.

In today's Flow Show, Steve Strazza and I discuss our growing frustrations with the current market environment. Seems neither our bullish bets nor our bearish bets are gaining any traction in this tape.

What can we do with this information?

Watch the show below to see how we arrived at the details for today's trade.

Here's the Play:

I like entering into a $FCX February 30/35/45/50 Iron Condor for an approximately 70-cent net credit. This means I'll be short equal amounts of the February 35 puts and 45 calls, and long the same amount of 30 puts and 50 calls to cap my maximum risk:

As long as $FCX stays inside the range of our short strikes (above $35 per share and below $45 per share), we'll profit in this trade. 

I'll leave a resting order to close this entire spread for a 30 cents net debit to book my profit. This will represent a capture of a little greater than 50% of the premium I collected up front from...

With $VIX currently sporting a 20-handle, it feels like a good time to add some delta-neutral exposure to the portfolio.

So I'm scanning the list of liquid sector ETFs to see which one's offer good premiums and potential range-bound trading action.

Here's what I found:

We had a discussion in the All Star Options chatroom yesterday about differences of opinion that got my mind spinning in a very positive way.

Sometimes, we traders might get a little offended when we've done the work to come up with a trade idea and share it with others -- then someone else offers a hot take on why the originator of the idea might be wrong. For some of us, we get momentarily annoyed, then we forget it and move on. For others, the "new information" causes us to abandon our trade thesis all together, sending us back to the drawing board in a state of frustration.

In the worst case, the originator of the idea gets offended, defensive, and perhaps even verbally abusive. And then both sides engage that way and nothing good comes from it.

I'd argue my best response is to meet the counter-intelligence as an opportunity to dig deeper to see if perhaps I missed something? If I find that I have, great! I'm better for it. If not, then I'll just end up feeling better about my opinion.

But the real meta thought here is this: WE WANT PEOPLE TO DISAGREE WITH OUR IDEAS.

Disagreement is the very basis of our profit...

As stocks continue to slide, there are certain sectors and individual names that are beginning to reveal their strength.

It is times like these that offer better than average potential rewards to risk if we mind our risks carefully.

Today's trade is in a stock that looks to be emerging from a two-year consolidation that has come at the end of a massive 10-year base!

Today's trade offers a nice opportunity to add some diversification to my mostly long book.

It's no secret that there has been a lot of weakness that has been masked by the performance of the broader indexes. 

We've got a well-diversified business that is showing signs of completing a pretty large top, so it might offer us some alpha on the downside if weakness spreads.

Today's trade is in a $1B company that provides automatic identification solutions to commercial and government customers. Being that this company participates in the Software & IT sector, I expect it to perform well in a market environment where semiconductors are leading the way.

Today's trade is in a stock who's price action is mimicking what their products delivers for its customers -- it's going vertical! How's that for kizmet?

That trade might classify as a "hard trade," but I'll be doing what I can to increase the odds of success in my favor.

This post has been made public after the trade was closed and is no longer active. All information shared is for educational purposes only and does not constitute financial advice.

As long as the pattern in today's trade holds up high, then we can profit in today's trade.

If it follows through on the upside, all the better and we'll achieve our profit target all the sooner. But as long as it doesn't falter, that's all we need to profit.

Either way, we're leveraging what the options market is offering us to increase our odds of success.

Here's a one-year chart of YPF Sociedad Anonima $YPF:

This is a $17B integrated oil & gas company from Argentina.

Here's what my analysts had to say about it in a recent Junior Hall of Famers report:

YPF recently completed a structural trend reversal on both absolute and relative basis.

Price is pressing against a critical resistance level at the 2014 cycle highs.

While some consolidation is more than welcome at current levels, if and...

If the bull market is going to resume higher, we think the semiconductors will lead the way. 

We positioned in a bellwether last week. Today, we're going to get into a name that'll give us a little more juice if we're right.