Cherry-picking Inflation

Inflation is in the news a lot lately. Check out the Google Search spikes. Google Trend searches are measured 0-100 with 100 being the peak of searches for the measured time frame. Clearly, inflation’s on everyone’s minds… So how would we play for inflation or at least add some inflation defensive positions? One possibility is … Continued

Summer Doldrums? There is a Trade For That

Volatility tends to be low in the summer! May, June and July tend to have the lowest monthly VIX average prices. Traders and business tend to slow down in the summer and it seems the government is also quieter in the summer months. Look below: Over the last 20 years, May, June and July have … Continued

Hey Volatility, What are you implying?

Implied Volatility readings across various liquid asset classes continue to deflate, generating much the same assumption that seems to be applied to the S&P 500-based VIX: ’“perhaps the summer doldrums have come early”. We have seen relative expected activity readings drop back to levels last seen before the pandemic. In the period preceding the dramatic … Continued

Playful Summer Stocks

Last week we included a sweet graphic. May, June, and July tend to have the lowest monthly VIX average prices. Everything tends to shut down during the summer, but recreational stocks are up; NCLH, CLL, UAL, & AAL are all up over 25% YTD, SPY is up 12.6%. The full dataset can be found here. … Continued

Crypto Scalping

It is easy to purchase any of these coins on the tastyworks platform. Check out the daily “scalping range” of BTC/USD. A single coin has had a daily range of +/- $2171.79. Cherry Picks is written in collaboration with Michael Rechenthin, PhD, Head of Data Science at tastytrade; James Blakeway, CEO of Quiet Foundation, a … Continued

Breaking the Butterfly’s Wings

Transform a low-profit, low-risk trade into one with higher profit but higher risk The butterfly, a low-probability, low-risk options trading strategy, doesn’t maximize profit, but it lessens risk. That’s why investors use it for speculation. Say a trader thinks Amazon (AMZN) priced at $3,500 isn’t going to move much by expiration. Then, the trader could … Continued

Retail Options

The list of retailers, right, is sorted from high to low with respect to volatility. Etsy has the highest volatility among the group, while Costco has the lowest. So how should these stocks be traded?  Let’s examine a semi-aggressive bullish strategy and a semi-aggressive bearish strategy for Etsy and Costco. These are debit spreads, so … Continued

Calculating Correlation

Here’s how to compute the relationship between two stocks without having to leave home. Market correlation helps traders understand the relationship between two stocks or indexes. A table filled with information on the subject (below) should help explain the phenomenon. Traders can use readily available data to calculate the correlation of any combination. For a … Continued