Sangamo shares pop 19% on gene therapy news
Shares of Sangamo Therapeutics (SGMO) closed 19.15% higher today, November 4, on good news from multiple clinical trials at the gene therapy company.
Buying another VIX “Fear” Option as market puts risk insurance on sale again
Investors and traders are showing no interest in paying to hedge risk in this market–even though we’re again near the all-time high for the Standard & Poor’s 500. Today, as of 3 p.m. New York time the CBOE S&P 500 Volatility Index (VIX) has dropped another 3.31% to 15.77. That puts the index back in my buying range and today I’m adding the December 22 VIX Call Option with a strike price of $18 (VIX211222C00018000) to my Volatility Portfolio.
Call to Action: Sell November VIX Calls at 18 and Roll into December Calls at 19
Huge surge in volatility this morning. It’s as if everybody woke up and said, “Hey, you know there are risky trends in the world.” As of 12:30 p.m. New York time today, Monday, September 20, the CBOE S&P 500 Volatility Index is up 29.51% to $26.08. I think there’s more volatility ahead so today I’m going to sell the VIX November 17 Call Options with a strike price of 18 in my Volatility Portfolio and buy some more time with a purchase of the VIX December 22 Call Options with a strike price of 19.
How high will it go? VIX climbs another 11% today setting up test of top of recent range next week
The CBOE S&P 500 Volatility Index (VIX) closed at 20.69 today, up another 10.7%. That took the “fear index” above the 200-day moving average at 19.98. The VIX had previously moved above the 50-day moving average at 17.86. I’d be surprised if we don’t see more market nerves driving more buying of S&P hedges to send the VIX higher next week.
Selling my Call Options on a runaway Microsoft
A day after shares of Microsoft (MSFT) hit another all time high (see my post from yesterday August 19 on why) the shares have tacked on another 2.63% (as of 3:10 p.m. New York time) today to trade at $304.58. That has pushed the price of the September 17 Call Options with a strike price of $285 in my Volatility Portfolio up another 42.04%.
Why Microsoft outpaced the market and techs today
Today Microsoft (MSFT) closed up 2.08%. The NASDAQ 100 was ahead just 0.51% and the Standard & Poor’s 500 gained only 0.13%. The gains took Microsoft shares to a record intraday high of $297.35. Why the extra pop in Microsoft shares? Because today Microsoft raised the price of its Microsoft 365 productivity suite (Word, Excel, PowerPoint, Teams, Outlook and Enterprise Mobility) by as much s 20%, effective March 1. The price increase is the first since the launch of Office 365 ten years ago.
Trick or trend: Time to put the volatility trade back on as VIX drops below 17 again
On Friday, August 6, the CBOE S&P 500 Volatility Index (VIX) retreated another 6.54% to 16.15. 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.) This trade, which is not dependent on any call about a bear market or even a market correction but rather on the simple bounce from levels of extreme compliance, recommends buy the Call Option on the VIX when it breaks below !6 and then selling the Call Option when it breaks above 20.
Selling Meituan and Naspers to cut China exposure
Last Wednesday, July 28, Chinese financial regulators told big investors–banks and investment groups heavily exposed to China’s stock market–not to worry. China’s financial markets were sound and despite the fears engendered by the government’s crackdown on the country’s private, for-profit, education companies, the government was not looking to reverse decades of growth by companies in China’s private sector. The meeting worked. Stocks of companies like Meituan (MPNGF), China’s dominant food delivery company (with ambitions to become a full-range e-shopping competitor) rose to $30.07 on the day from $26.00 the day before. But the reassurance worked for only a few days. Today, August 3, for example, Meituan was back in the red, falling 4.48% to $26.95 to erase almost all of its “re-assurance” bounce. Today, I’m selling Meitun and Naspers (NPSNY), a South African company with a huge position in China’s Tencent Holding (TCEHY) out of my Volatility and Jubak Picks Portfolios, respectively.
Watch my new YouTube video: Is China un-investable?
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My thirty-sixth YouTube video “Is China un-investable?”-went up today.
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
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
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.
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