This post is a selection of insights from our reports to subscribers this week, showcasing how we build the contextual framework to find daily trade ideas. This is a repeatable process aimed at finding high-risk-reward trades. Note that the onus is on the subscriber to pick and choose which trades fit their overall risk.
In this week’s blog post, as part of the insights and trade ideas shared with subscribers, we focused on the good value that represents owning gamma in Bitcoin, the carry trade we put on $XLV to earn theta over the holiday period, and the long delta trade in the SPY as the bullish trend remains incessant.
For a deeper dive into how I structure my trade ideas and to learn my thorough process, watch our Free Options Trading Webinar.
Gamma is Good Value to Own in Bitcoin
In our weekly crypto report, we wrote that with the deeply negative volatility carry in crypto, it suggests that gamma (highest in short-dated options) is good value to own. Therefore, we see scope for more volatility by end of this week or over the weekend, especially on the upside if inflows were to come back for quarter end. Using short dated ATM calls and selling longer dated OTM calls can be a nice way to participate in a near-term rally and not have to pay too much decay.
Carry Trade via $XLV
We also executed a carry trade as we want to earn theta over the holiday period and this sector XLV (Health Care Select Sector SPDR Fund) has been exhibiting good positive carry as of late.
Long SPY Delta Trade
We added a new trade on the SP500 as a way to be long SPY Delta but with some protection. We used the shorted-dated options to fund the theta and will systematically roll or rebalance the position to maintain a long delta of 20-30%.
Remember, not only do I share these trade ideas, but the ones I end up adding to my portfolio, are then tracked via a 20-30m weekly webcast as part of our Macro Options Overlay. You get to learn how to break down options trades by Greeks and restructure trades in an optimal way.
We also offer training courses that teach you the concepts and mechanics that affect how options contracts perform. You will learn what makes a great trade, and what is just a gamble. The result? Higher quality ideas, more consistent returns. Find out more in our Educational courses.
Remember, you now have a chance to build your knowledge base via our FREE Options Insight webinar! You will learn the process and tools I follow, from thesis to trade idea and actual execution.
Just click the link below!
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Thank you for making it this far!
As always, if you have any questions, comments, and/or found this helpful, feel free to reach out and let us know at info@options-insight.com
Cheers!
Imran Lakha
Options Insight
