THE WEEK AHEAD: EARNINGS APLENTY (PLUS THAT LITTLE SHUT-DOWN)
Earnings season is in full swing, with a bevvy of announcements:
NFLX: announces on Monday after market close, with a rank of 79 and a background of 44.
VZ: Tuesday, before market open -- rank 80/background 25.
PG: Tuesday, before market open -- rank 86/background 17.
GE: Wednesday, before market open -- rank 100/background 39.
CAT: Thursday, before market open -- rank 84/background 30.
CELG: Thursday, before market open -- rank 78/background 36.
UNP: Thursday, before market open -- rank 78/background 30.
INTC: Thursday, after market close -- rank 97/background 31.
SBUX: Thursday, after market close -- rank 90/background 26.
ABBV: Friday, before market open -- rank 78/background 26.
At the moment, none of these precisely meet my criteria for a play (rank >70; background >50), but NFLX is fairly close and may frisk up during the regular session. Preliminarily, the Jan 26th (5 days 'til expiry) 205/240 is paying 4.66 at the door with break evens wide of the expected. A defined risk setup with the same strikes -- the 200/205/240/245 iron condor pays 1.72, with a max loss of 3.28 and break evens of 203.28 and 241.72 -- basically right at the expected move on both sides.
On the exchange-traded funds front, the top three funds ranked by implied volatility rank or percentile are: FXI (75/22), XLB (79/16), and XLU (86/17). As with earnings, these don't meet my criteria for a play (rank >70; back ground >35), but it's always worth knowing what is potentially on the move or might set up for a play given the right conditions.
With volatility products, I'm basically hand-sitting here (there was no weekly expiry to take advantage of last week). I added a few spreads on that pop and don't want to go overboard in the event that there is further market unrest in connection with the government shut-down. Although the VXST/VIX ratio has trundled down to below 1.00, it still remains fairly high at .924 and VVIX is still >100 (101.59). Instead, I'm looking to scratch out the most at-risk spreads I have on (VXX 25.5/28.5's, generally) if I get an opportunity to do so, since that uptick got me in at better strikes ... .
NFLX: announces on Monday after market close, with a rank of 79 and a background of 44.
VZ: Tuesday, before market open -- rank 80/background 25.
PG: Tuesday, before market open -- rank 86/background 17.
GE: Wednesday, before market open -- rank 100/background 39.
CAT: Thursday, before market open -- rank 84/background 30.
CELG: Thursday, before market open -- rank 78/background 36.
UNP: Thursday, before market open -- rank 78/background 30.
INTC: Thursday, after market close -- rank 97/background 31.
SBUX: Thursday, after market close -- rank 90/background 26.
ABBV: Friday, before market open -- rank 78/background 26.
At the moment, none of these precisely meet my criteria for a play (rank >70; background >50), but NFLX is fairly close and may frisk up during the regular session. Preliminarily, the Jan 26th (5 days 'til expiry) 205/240 is paying 4.66 at the door with break evens wide of the expected. A defined risk setup with the same strikes -- the 200/205/240/245 iron condor pays 1.72, with a max loss of 3.28 and break evens of 203.28 and 241.72 -- basically right at the expected move on both sides.
On the exchange-traded funds front, the top three funds ranked by implied volatility rank or percentile are: FXI (75/22), XLB (79/16), and XLU (86/17). As with earnings, these don't meet my criteria for a play (rank >70; back ground >35), but it's always worth knowing what is potentially on the move or might set up for a play given the right conditions.
With volatility products, I'm basically hand-sitting here (there was no weekly expiry to take advantage of last week). I added a few spreads on that pop and don't want to go overboard in the event that there is further market unrest in connection with the government shut-down. Although the VXST/VIX ratio has trundled down to below 1.00, it still remains fairly high at .924 and VVIX is still >100 (101.59). Instead, I'm looking to scratch out the most at-risk spreads I have on (VXX 25.5/28.5's, generally) if I get an opportunity to do so, since that uptick got me in at better strikes ... .