9.29 VIX and it feels like we are putting the holiday in to the SPX IV already. 9 VIX does put me into a bit of a buying mode so I started going through my list of names that should be at lower IVs over the next 90 days. And low and behold I did not find what I thought I would find.
Tech is still where it’s at with most of the big names reporting earnings beats. Even lowly TWTR managed to squeak out a big move up now that profitability looks much more likely. Long term IV is still cheap in there. Evaluating volatility and position structure is a learned skill and that is what we teach in our Gold Course.
The Tweeting President, TWEET this and TWEET that. There are few products used and mentioned more than TWTR on a daily basis and have a stock price that does so little. I can’t think of any stocks really. Trading options comes in two schools in my opinion:
You stock is a vehicle to trade the options
The options are a vehicle to trade the stock
My general rule trading TWTR is don’t get long without puts. After learning the hard way on the 2015 trip from mid 30 to the low 14s in 2016 the only thing that kept it from being a disaster was rolling my put protection down. The near takeout in Oct/Nov gave me an exit which I took. Now here we sit around 17.09 with Jan IV in the 30 handle. Noone cares for the Dirty Bird anymore.
That was quite a week and 2 days. Before Donald J Trump stunned the media with his election win, he was a power user of TWTR. Various reports about what he will tweet in the future are unknown to me as I write this but it is safe to say TWTR will keep buzzing with the social media malestorm he helped create. The fact that TWTR is now stuck in the popular culture is pretty hard to dispute.
Seeing news reports on TWTR about AMZN using couriers to deliver packages gave me the UBER kind of feeling. UBER is on its way to becoming one of the highest valued pre-IPO companies on the planet and it makes some sense AMZN is taking a page from its playbook. That got me looking to AMZN volatility and it is very cheap.
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Stocks regained from lows today after a near panic selloff in Chinese equities. Prices here are down only fractionally as selling in China and the accompanying volatility is becoming habit as Beijing tries to kill the speculation. On the opposite side of the spectrum is TWTR. Not a lot of speculating there.