I like to trade strategies that are either quick Open and Close, or where I can take advantage of theta and veta decay against short positions. In such choppy markets, I've found that Iron Condors can be extremely profitable as day in and out it's quite realistic to see 5 days of price action in 1 or 2 days. The fast movement in the price action aggressively decays the credit spread with the losing deltas, and a day or two later the price would turn around moving away from the remaining spread. Allowing you to close a new losing side, while re-opening the spread you closed the day before for a higher credit because of the increasing deltas.
For the last month, I've been doing this '90's Body Roll' version of moving in and out of Call and Put Credit spreads, like teenagers grinding to Aaliyah at homecoming. Yes, I'm showing my age, and Yes I'm re-living the best moments of 'Fresh off the Boat'.
However, Amazon has made me do a bit more babysitting of positions than I like, or I'm used to. Amazon's Thursday drop to Dante's 12th Circle of Hell, decayed all my Call Credit Spreads. But, with the fast movement, my closing orders were never filled. I was a bit (extremely!) frustrated as I was not sure what would happen over earnings.
Of course then like an Olympic gymnast Amazon looked like it was trying to Simone Biles to new heights! So, on the Friday I closed my Put Credit Spread side of my Iron Condors quite profitability, but was now faced with developing my thesis regarding my call side spreads which were now basically: In The Money!
So, as the Friday opened and progressed, I needed to watch the changes in Open Interest. I was unsure how Friday would really unfold when 60,000 short puts entered the market slowly over first hour, an institution trying to aggressively hedge their shares! However, I felt confident we would finally see a drop when those same 60,000 puts were closed an hour before closing. A cheeky Institution knew they could sell a heavy FISTED put side to inflate price aggressively, but once the price reached their sell price, they slowly started dumping their shares for the last two and half hours of the day. And then, when their puts were nearly worthless they cut the cord, eliminating that down side support area. When those 60,000 short puts closed in the blink of an eye, they let price humiliate itself!
However, the price drop was SO late into the Friday market that my Call Credit Spreads didn't close. Now in all honesty I still have time, so I told myself to just rest well evaluate the moving averages, the sectoral strength, and other indicators, but what was VERY telling was that the Open Interest on next Friday's expiration February 11t could be better described as none, than slim.
For the last month, I've been doing this '90's Body Roll' version of moving in and out of Call and Put Credit spreads, like teenagers grinding to Aaliyah at homecoming. Yes, I'm showing my age, and Yes I'm re-living the best moments of 'Fresh off the Boat'.
However, Amazon has made me do a bit more babysitting of positions than I like, or I'm used to. Amazon's Thursday drop to Dante's 12th Circle of Hell, decayed all my Call Credit Spreads. But, with the fast movement, my closing orders were never filled. I was a bit (extremely!) frustrated as I was not sure what would happen over earnings.
Of course then like an Olympic gymnast Amazon looked like it was trying to Simone Biles to new heights! So, on the Friday I closed my Put Credit Spread side of my Iron Condors quite profitability, but was now faced with developing my thesis regarding my call side spreads which were now basically: In The Money!
So, as the Friday opened and progressed, I needed to watch the changes in Open Interest. I was unsure how Friday would really unfold when 60,000 short puts entered the market slowly over first hour, an institution trying to aggressively hedge their shares! However, I felt confident we would finally see a drop when those same 60,000 puts were closed an hour before closing. A cheeky Institution knew they could sell a heavy FISTED put side to inflate price aggressively, but once the price reached their sell price, they slowly started dumping their shares for the last two and half hours of the day. And then, when their puts were nearly worthless they cut the cord, eliminating that down side support area. When those 60,000 short puts closed in the blink of an eye, they let price humiliate itself!
However, the price drop was SO late into the Friday market that my Call Credit Spreads didn't close. Now in all honesty I still have time, so I told myself to just rest well evaluate the moving averages, the sectoral strength, and other indicators, but what was VERY telling was that the Open Interest on next Friday's expiration February 11t could be better described as none, than slim.
So lets talk about Yesterday, Monday...
