March 23, 2023 | Daily JAM, Videos |
Today’s Quick Pick is SPDR S&P Bank ETF (NYSEARCA: KBE). I’m not suggesting buying this now: I’m suggesting you watch this and buy Put Options on this ETF when the time is right. The SPDR S&P ETF is approximately 80% regional banks. As you can imagine, it took a huge hit during the recent banking scare and would have been a great Put Option last week during the plunge in the sector. Options are a way to leverage the volatility of this market. The recent exit of my VIX Call Option resulted in a 100% gain in about a week. For KBE, I’d look at Put Options that climb in value as the price of the ETF sinks. At the time of recording, KBE was selling at about 37. I’m looking at the June 16 Put at a strike price o 38. At the moment, the Put is deeply underwater but I’ll continue to watch this rally to see when it’s worth it to jump in. At the moment, I suggest you watch this one: Don’t buy just yet but wait for the next shoe to fall in the banking crisis.
March 21, 2023 | Daily JAM, Morning Briefing |
On March 6, I bought the May 17 Call Options with a strike of 23 on the CBOE S&P 500 Volatility Index (the VIX) when the index traded at 18.61. I figured that the “Fear Index” was so low that it wouldn’t take much to push it and these options higher. A week later the options were up 116% after the VIX climbed to 26.52. Historically, that isn’t a very high reading for the VIX, which can easily hit 35 to 45 when fear engulfs the market. I’m still holding my June 21 Call Options with a strike of $23. But I’ve been looking for a chance to replay that earlier trade. Somehow (LOL) I don’t think this market is done with volatility.
March 21, 2023 | Daily JAM, Short Term, Videos, VIX |
This week’s Trend of the Week: There is no Trend. When I was filming this video on Tuesday the 14th, the S&P was up almost 2%, the DOW was up almost 1.5%, the NASDAQ was up 2.23% and the VIX, which had been climbing higher with the Silicon Valley Bank collapse, was down almost 15%. Since filming, the markets dipped sharply with the threat of Credit Suisse going under, and have trended slightly upward since. If you’re going to trade in this market, you have to do one of two things. One thing is to be very fast, and trade on the bounces as they show up. The other tactic is planning ahead. Long-term in this market is about a week. A week prior to filming (3/6) I bought Call Options on the VIX (the volatility index) and I sold them on March 13 with a 108% return. On March 14, however, those VIX Call options were down 27%. Talk about volatility! The trend is, there is no trend. Subscribe to my JubakPicks.com to get timely posts on how to keep up with the chaos. For more options and other volatility plays, subscribe to JubakAM.com.
December 23, 2022 | Daily JAM, Morning Briefing, Videos, VIX, Volatility |
Today I posted my two-hundred-and-nineteenth YouTube video: Fear Is Still on a Holiday Today’s topic: Fear is Still on a Holiday. This is a peculiar market for many reasons. Stocks are sinking, but volatility fear doesn’t seem to be rising. On December 20, for example, the S&P 500 fighting a 5-day losing streak. Havens of safety were getting smaller. Pharmaceuticals and airlines, which have been strong recently, sold off on December 19. Searching for glimpses of green, like Coke (up just .14%) in a sea of red is getting harder and harder. What’s curious though, is the VIX, the CBOE Volatility Index, better known as the “Fear Index” remains on the average to low end of its recent and historic range. their recent range. The VIX tracks prices for options and futures on the S&P, so as people, in fear of a downturn, hedge by buying “insurance” against a market drop, the VIX rises. But right now we’re seeing a market that truly stinks–that’s a technical term, I know, but you can Google it–while the VIX remains low, showing little sign of fear. My explanation is that at the end of the year, investors aren’t looking to hedge against a market they still hope will turn around. The VIX is an interesting short-term play here. Buying a Call option with a 60-day out as the market returns to fear, or rationality, in 2023 could be the way to go. I’m going to check on the up-to-the-minute price action and see if the Call option is attractive here. Look to my paid JubakAM.com and my free JubakPicks.Com sites on Friday for a buy or not.
June 27, 2022 | Daily JAM |
My one-hundred-and-fiftieth YouTube video “Trend of the Week: You Can’t Trade Random Volatility” went up today. I like volatility–much of the time. It’s a source of potential profits. However, when the volatility seems random as it does right now, it’s difficult to trade well, as each choice feels like a roll of the dice. Why was Plug Power (PLUG) up 11% in a day, while Pioneer Natural Resources was down 8% that same day–only to have their situations reverse the next day? It seems that much of this is driven by trader sentiment (It’s been down so isn’t it due to move up?) as opposed to actual market news.
June 6, 2022 | Daily JAM, Jubak Picks |
I’m seeing a lot of traders buying Alcoa (AA) Call Options ahead of the company’s July 21 earnings report. The action seems to be most concentrated on the $70 October 21 Call at $75. The stock closed at $64.10 today, June 6, up 3.53%. I think the Call Buying is a result of the very big spread in estimates for second quarter earnings with the high estimate at $4.01 and the lost at $3.19. The consensus for the quart is at $3.66. That would be a huge gain from the $1.49 reported in the second quarter of 2021.
April 5, 2022 | Daily JAM |
I’m not putting on any leverage bets on market direction at the moment. The trend is just too “trundles.”
April 4, 2022 | Daily JAM, Videos |
This week’s Trend of the Week asks Why, despite all the turmoil in the markets, has the CBOE Volatility Index–also known as the VIX, or the “Fear Index,” remained so low? I think this should signal to us that the market has not currently worried in the near term about long-term problems it knows are coming down the road, like rate hikes and a recession at the end of 2022 or in 2023.. In the VIX’s short-term view, there’s no need to worry. Time to put a call on the VIX?
March 19, 2022 | Daily JAM, Friday Trick or Trend |
Here is what I expect: A strong spring and summer rally–powered by FOMO and by gains in Post-Pandemic economic recovery stocks. But that rally will be subject to big plunges because so many investors are poised to sprint for an exit. And all of this, later in 2022 will be followed by an actual Recession market. My worry is that the FOMO rally will make it harder for investors to make the moves they need t make now to prepare for that Recession market. The time to prepare is now nd not when everybody has bid up the price of Recession market favorites. Tricky, no?
March 17, 2022 | Daily JAM, Morning Briefing |
Friday, March 18, is a triple-witching day in the options market where roughly $3.5 trillion of single-stock and index-level options are set to expire, according to Goldman Sachs. At the same time the market wills the rebalancing of benchmark indexes, including the Standard & Poor’s 500.
March 9, 2022 | Daily JAM, Mid Term |
Consternation isn’t an investment strategy. Although I certainly understand that reaction to current stock market moves. The day to day volatility is that extreme. But if we focus on that volatility and on how confusing this market is, I think we’re in danger of overlooking the investable trends (up and down) in this market. So let me try, please remember that this is a work in progress and subject to revision, to tease out some of the longer trends that will drive stock prices in the medium term.
February 17, 2022 | Daily JAM, Short Term, Volatility |
$2.2 trillion of options are set to expire on Friday. That includes $545 billion on individual stocks, Goldman Sachs estimates. And about $985 billion of S&P 500-linked contracts and $165 billion in options tied to the SPDR S&P 500 ETF (SPY), the world’s largest exchange-traded fund, Bloomberg reports.
During the last year equity indexes have shown a reliable pattern of lurching lower near the expiration Friday
