Volatility

Rebuying VIX Calls for the Volatility Portfolio

Rebuying VIX Calls for the Volatility Portfolio

Today the CBOE S&P 500 Volatility Index (VIX) dropped another 2.24% to 15.70. That puts the “fear index” back in the “complacency zone” where I’ve been looking to buy Call Options on the VIX in anticipation of a bounce back to the top of the current zone at 20 on the next “bad news” day. (Whatever the bad news might be.)

Biden adds goals and rules to speed up transition to electric vehicles

Biden adds goals and rules to speed up transition to electric vehicles

Today President Joe Biden unveiled a plan that would speed up the transition to electric vehicles in the United States. Included was an executive order (in this case a goal) calling for half of new passenger car sales to be of electric vehicles powered by batteries and fuel cells or plug-in electric hybrids by the end of the decade. And new proposed regulations from the Environmental Protection Agency and the Transportation Department on greenhouse gas emissions and fuel efficiency for cars, SUVs and pickup trucks through model year 2026. The proposed regulations would reverse a Trump administration freeze on fuel-deficiency standards that was itself a reversal of the Obama administration regulations that would have ramped up average fuel economy to 54.5 miles per gallon by model year 2025.

Selling my AMD September 17 Call Options (strike price of $92.50) out of my Volatility Portfolio

Selling my AMD September 17 Call Options (strike price of $92.50) out of my Volatility Portfolio

I got another 50% pop (aso f 3:30 p.m. New York time) today in the price of the Advanced Micro Devices (AMD) September 17, 2021 Call Options with a strike price of $92.50 (AMD210917C0009250). I’m going to take my profits here. With the end of earnings season in the next two weeks, I think the risk/reward ratio for holding stocks is shifting toward risk. And I’d rather be more in cash rather than less as we head into what I see as a volatile fall.

An odd market before tech earnings #3: I’m buying Call Options on MSFT ahead of today’s report

An odd market before tech earnings #3: I’m buying Call Options on MSFT ahead of today’s report

With everything tech (just about) selling off today (along with the rest of the market) and with the shares of the tech companies due to report today dropping as well, I think the odds have improved for a bounce in those reporting companies on earnings surprises. Microsoft (MSFT) is due to report today after the close and I think there’s a good likelihood that the company will post even better than expected numbers from its Azure Cloud business.

An odd market before tech earnings #2: Selling my October VIX Call Options

An odd market before tech earnings #2: Selling my October VIX Call Options

With the major indexes all down ahead of tech earnings–and fear up–I’m pulling out my VIX options trade again. The rule here, until modified by reality (pesky little thing) is to buy when complacency drives the “fear index” to 16 or below, and to sell when fear rises and pushed the CBOE S&P 500 Volatility Index (VIX) to 20 or so. This morning selling in the market sent the VIX up to 19.85, close enough for me to 20, and I’m selling the October 20, 2021 Call Options

An odd market before big tech earnings #1–I’m holding onto my AMD and APPL options until after earnings

An odd market before big tech earnings #1–I’m holding onto my AMD and APPL options until after earnings

As of 12:15 p.m. the Standard & Poor’s 500 was down .01% and the Dow Jones Industrial Average was lower by 0.75%. Tech stocks were down much more with the NASDAQ Composite off 1.85% and the NASDAQ 100 lower by 1.82%. The tech companies due to report earnings today after the close were all down. Apple (AAPL) was lower by 1.68%. Advanced Micro Devices (AMD) had dropped 2.01%. And Microsoft (MSFT() was off 1.66%.

The window for using Call Options to profit from technology earnings season is starting to close

The window for using Call Options to profit from technology earnings season is starting to close

Just a reminder: To profit from anticipation of strong and maybe even better than expected tech stock earnings using Call Options, you want to buy the options before the actual earnings announcement. You’re betting on a rush to get in on the good earnings news before the actual news. Which means that if you’re looking to buy Call Options on Apple (AAPL) or Advanced Micro Devices (AMD) you want to do it NOW, since these companies announce second quarter earnings next week on July 27. Here are my preferences in tech stocks earnings options play

Rebuying VIX Calls for the Volatility Portfolio

Selling my September 15 VIX Call Options to take profits in today’s market plunge

As of 2:40 New York time the September 15, 2021 VIX Call Options with a strike at 20 (VIX210915C00020000) were trading at $5.90 a share, up 40.48% on the day on a move higher in the CBOE S&P 500 Volatility Index (VIX) of 30.35% to 24.05. I’m selling this volatility hedge out of my Volatility Portfolio with a profit of 17.5% since I added it to this portfolio on June 1.

Selling my AMD September 17 Call Options (strike price of $92.50) out of my Volatility Portfolio

Taiwan Semiconductor earnings on Thursday upended chip stocks–here’s why

On Thursday, July 15, Taiwan Semiconductor Manufacturing (TSM), the world’s leading chip foundry, reported earnings of 93 cents a share for the second quarter, up 18% year over year. That was inline with analyst estimates. Sales rose 28%. The company raised its revenue guidance for the third quarter to a range of $14.6 billion to $14.9 billion. The midpoint of that range, $14.75 billion, was above the Wall Street consensus estimate of $14.57 billion. Sales in the third quarter of 2020 are $12.4 billion.Taiwan Semiconductor said that it now expects sales to grow more than 20% this year, an increase from the 20% target announced earlier in the year. For 2020-2025, the company raised its revenue forecast to a compound annual growth rate of 15% from a previous target of 10% to 15%. But the stock dropped 5.5% on July 15 and fell another 1.52% on Friday, July 16. Why?