BACK TO WAITING FOR BROAD MARKET VOLATILITY ...
BROAD MARKET INSTRUMENT PREMIUM SELLING
Post-Brexit vote in late June, when VIX spiked to >25 (signalling a premium selling opportunity in broad market instruments like SPY/SPX and RUT/IWM in the July expiry), there has been but one >15 spike to >20 in mid-September that allowed for some premium selling in the October monthlies, which have since come off in profit in the ensuing volatility crush.
Consequently, I'm back to sitting on my hands waiting for another >15 VIX spike to sell premium in SPY/SPX or IWM/RUT in a November expiry and/or managing the small number of plays I have on as covered calls or premium selling in sector ETF's like GDX and XOP, where the implied volatility remains high compared to what it is in the broader market (48.4% and 35.5%, respectively).
CAN THIS EARNINGS SEASON NOT SUCK FOR PREMIUM SELLING?
Naturally, I'm also watching potential earnings plays, but I waved off many of those last season because they weren't up to snuff. Generally, I'm looking for those to have implied volatility above the 70% percentile for the past 52 weeks and implied volatility above 50%, and there haven't been many of those around of late due to general market volatility lull. The first earnings play of interest to me right now with a >70% implied volatility rank is EBAY (10 days out), but its implied volatility remains below 50% (35.2%)
Post-Brexit vote in late June, when VIX spiked to >25 (signalling a premium selling opportunity in broad market instruments like SPY/SPX and RUT/IWM in the July expiry), there has been but one >15 spike to >20 in mid-September that allowed for some premium selling in the October monthlies, which have since come off in profit in the ensuing volatility crush.
Consequently, I'm back to sitting on my hands waiting for another >15 VIX spike to sell premium in SPY/SPX or IWM/RUT in a November expiry and/or managing the small number of plays I have on as covered calls or premium selling in sector ETF's like GDX and XOP, where the implied volatility remains high compared to what it is in the broader market (48.4% and 35.5%, respectively).
CAN THIS EARNINGS SEASON NOT SUCK FOR PREMIUM SELLING?
Naturally, I'm also watching potential earnings plays, but I waved off many of those last season because they weren't up to snuff. Generally, I'm looking for those to have implied volatility above the 70% percentile for the past 52 weeks and implied volatility above 50%, and there haven't been many of those around of late due to general market volatility lull. The first earnings play of interest to me right now with a >70% implied volatility rank is EBAY (10 days out), but its implied volatility remains below 50% (35.2%)
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