MTM Options Trader Newsletter - IV for Options Is Dropping

[image]( [image] This Week in the Market Stocks took a turn for the worse early last week. As has been the case, however, the market showed it can be resilient as well with a fairly bullish rally on Friday. In MTM’s Group Coaching class, we have done several long double calendars on the SPY finding advantageous IV skews with lots of profitable success over the past few months. Who said volatility is not good? The S&P 500 is once again below its 200-day moving average, but it was able to close above its 50-day after dropping below it earlier in the week. There is still plenty of chatter about how high interest rates will go and how long they will remain there, but the market continues to hold its own. Implied volatility levels and general option prices remain low. We have not had too many full weeks of trading so far this year, but this will be one of them. There are a lot of economic reports due out this week, including the latest update to the GDP and a couple of housing reports. Thursday looks to be exceptionally heavy for releases. If that were not enough, quarterly earnings are accelerating with many companies slated to announce this week, including Tesla and Boeing. Remember to check and confirm the expected earnings report before taking any trade. Have a healthy, safe and prosperous week! Jan 23: Leading Economic Indicators Jan 24: S&P Manufacturing and Services PMI Jan 26: Jobless Claims Jan 26: GDP Jan 26: Trade in Goods Jan 26: Durable Goods Jan 26: New Home Sales Jan 27: Consumer Spending Jan 27: Pending Home Sales [Read Our Blog]() IV for Options Is Dropping I started out my Group Coaching class recently by talking about how it may be a bit more difficult to find option trades than it was a couple of weeks ago. As you know, everything in options trading is a trade-off. If the probability to make money is good, the risk/reward is not so good. If the risk/reward is fairly good, most likely the probability is lower. The market may be a bit more difficult right now, so let me explain my thoughts. IV Levels Have Fallen Implied volatility levels have dropped drastically over the past couple of months. Take a look at this daily chart of the VIX (S&P [Continue Reading ...](=) MTM Watchlist Here are a few trade ideas we will consider in group coaching class this week: SPY – Until this ETF stops giving and we stop taking, it needs to be traded. Vertical credits and more long calendars will be examined on a day-to-day basis. JPM – The stock, along with the market, has pulled back after its earnings report and has landed at its 50-day moving average. With a bullish trigger, we will look for bull call and bull put opportunities. ZM – The stock has been trading relatively sideways and below its 50-day moving average. Potential bear call spreads around the moving average will be explored. [image](=) The strategies in this newsletter are for educational and informative purposes only. All information disclosed in this newsletter should not be considered complete in its entirety. Market Taker Mentoring, Inc. will not be held responsible for changes, oversights, errors or omissions. Dates, prices, news and other information may not be accurate. Please verify all information before trading. You alone are responsible for your own investment decisions. Options involve risk and are not suitable for all investors. Before trading options, please read Characteristics and Risks of Standardized Option (ODD), which can be obtained from your broker; by emailing investorservices@theocc .com; or from The Options Clearing Corp., 125 S. Franklin St., Suite 1200, Chicago, IL 60606. No statement in this newsletter is intended to be a recommendation or solicitation to buy or sell any security or to provide investment or trading advice. Traders and investors considering options should consult a professional tax advisor as to how taxes may affect the outcome of contemplated options transactions. Copyright Market Taker Mentoring, Inc. 2008 - 2023. All rights reserved. Reproducing or redistributing this content is a violation of federal law. [image] If you do not wish to be contacted via email, you can unsubscribe using this link: [Unsubscribe]( Unsubscribing from email notifications DOES NOT cancel your class, subscription or recurring payments. We recommend that current students do not unsubscribe from email notifications. If you unsubscribe from email notifications, you will not be notified on how to access the classes or subscriptions in which you are enrolled. Market Taker Mentoring, Inc. PO Box 117 Frankfort, Illinois 60423 United States