EARNINGS:
Only one underlying makes my cut for a earnings announcement volatility contraction play: GPS (25/70/14.9%),* which announces on Tuesday after market close, so look to put on a play in the waning hours of Tuesday's session.
To me, it's small enough to short straddle, with the pictured setup paying 3.72 (.93 at 25% max). Alternatively, go short strangle: the December 18th 22/29 was paying 1.25 (.62 at 50% max).
Of a defined risk bent? Go iron fly with the December 18th 20/25/25/30 and get better than risk one to make metrics, with the setup paying 3.00 even as of Friday close (.75 at 25% max).
EXCHANGE-TRADED FUNDS RANKED BY BANG FOR YOUR BUCK (JANUARY 15TH EXPIRY):
KRE (22/40/14.0%) (Yield: 3.43%)
XLE (25/43/12.5%) (Yield: 6.15%)
EWZ (17/43/12.2%) (Yield: 2.89%)
GDX (13/37/11.7%) (No dividends)
SLV (22/37/10.8%) (No dividends)
BROAD MARKET RANKED BY BANG FOR YOUR BUCK (JANUARY 15TH EXPIRY):
IWM (24/30/8.5%)
QQQ (20/26/7.6%)
SPY (18/23/6.2%)
EFA (16/19/5.3%)
* -- The first metric is volatility rank/percentile (i.e., where 30-day implied volatility is relative to where it's hung out the past 52 weeks); the second, 30-day implied; and the third, what the December at-the-money short straddle is paying as a function of stock price ("Bang for Your Buck").
Only one underlying makes my cut for a earnings announcement volatility contraction play: GPS (25/70/14.9%),* which announces on Tuesday after market close, so look to put on a play in the waning hours of Tuesday's session.
To me, it's small enough to short straddle, with the pictured setup paying 3.72 (.93 at 25% max). Alternatively, go short strangle: the December 18th 22/29 was paying 1.25 (.62 at 50% max).
Of a defined risk bent? Go iron fly with the December 18th 20/25/25/30 and get better than risk one to make metrics, with the setup paying 3.00 even as of Friday close (.75 at 25% max).
EXCHANGE-TRADED FUNDS RANKED BY BANG FOR YOUR BUCK (JANUARY 15TH EXPIRY):
KRE (22/40/14.0%) (Yield: 3.43%)
XLE (25/43/12.5%) (Yield: 6.15%)
EWZ (17/43/12.2%) (Yield: 2.89%)
GDX (13/37/11.7%) (No dividends)
SLV (22/37/10.8%) (No dividends)
BROAD MARKET RANKED BY BANG FOR YOUR BUCK (JANUARY 15TH EXPIRY):
IWM (24/30/8.5%)
QQQ (20/26/7.6%)
SPY (18/23/6.2%)
EFA (16/19/5.3%)
* -- The first metric is volatility rank/percentile (i.e., where 30-day implied volatility is relative to where it's hung out the past 52 weeks); the second, 30-day implied; and the third, what the December at-the-money short straddle is paying as a function of stock price ("Bang for Your Buck").