The Week Ahead: TWTR, UAA, GPN, PFE Earnings; ARKK, XBI, XRT
Earnings Announcements in Options Liquid Underlyings with >70 rank and >50% 30-Day Implied:
TWTR (93 rank/90 30-day implied) (Thursday, before market open)
UAA (80/68) (Friday, before market open)
GPN (71/51) (Thursday, before market open)
PFE (76/42) (Tuesday, before market open)
Pictured here is a directionally neutral TWTR short strangle paying 1.34 on a buying power effect of 3.71 (on margin), 36.1% ROC at max; 18.1% at 50% max. It announces earnings on Thursday before market open, so look to put on a play in the waning hours of Wednesday's session if you want to take advantage of the ensuing volatility contraction post-announcement on Thursday.
For those more of a defined risk bent, consider the February 18th 25/30/44/49 iron condor, paying 1.14 at the mid price as of Friday's close on buying power effect of 3.86, 29.5% ROC at max, 14.8% at 50% max with 2 x expected move break evens.
UAA is probably small enough to short straddle/iron fly, with the February 18th 19.5 short straddle paying 2.42 on buying power of 3.93 (on margin), 61.6% ROC at max, 15.4% at 25% max. The risk one to make one iron fly would be a "stays within the expected move" sort of play with the February 18th 15.5/19.5/19.5/23.5, paying 2.03 on 1.97, 103% ROC at max; 25.8% ROC at 25% max.
The GPN February 18th 130/160 short strangle was paying 2.97 on buying power of 14.97 as of Friday's close, 19.8% ROC at max, 9.9% at 50% max. The bid/ask is showing wide in after hours, and I don't particularly like the five wides where I want to pitch my tent. This is probably why I haven't bothered to play it before.
Although PFE's 30-day is a bit <50%, I figured I'd price out a setup because of its high options liquidity. Unfortunately, it's not very compelling at the moment, with the 16 delta 48.5/58.5 in the February 18th contract paying a scant .89 on buying power of 6.12 as of Friday's close -- 14.5% ROC at max, 7.3% at 50% max.
Exchange-Traded Funds With Ranks >50 and 30-Day IV >35%:
ARKF (76/63)
XBI (71/45)
ARKK (70/67)
ARKG (70/65)
XRT (63/46)
KWEB (63/54)
SMH (60/41)
GDX (50/45)
Pick your Cathie Woods poison (ARKF, ARKK, ARKG), I guess. Otherwise, sell premium in XBI or (there's one I haven't seen in a while) ... XRT, although you're probably going to get more bang for your buck out of KWEB, with its higher 30-day.
Broad Market Exchange-Traded Funds, Ordered By Implied Volatility Rank:
QQQ (55/29)
IWM (54/30)
EFA (43/19)
SPY (41/22)
DIA (40/21)
TWTR (93 rank/90 30-day implied) (Thursday, before market open)
UAA (80/68) (Friday, before market open)
GPN (71/51) (Thursday, before market open)
PFE (76/42) (Tuesday, before market open)
Pictured here is a directionally neutral TWTR short strangle paying 1.34 on a buying power effect of 3.71 (on margin), 36.1% ROC at max; 18.1% at 50% max. It announces earnings on Thursday before market open, so look to put on a play in the waning hours of Wednesday's session if you want to take advantage of the ensuing volatility contraction post-announcement on Thursday.
For those more of a defined risk bent, consider the February 18th 25/30/44/49 iron condor, paying 1.14 at the mid price as of Friday's close on buying power effect of 3.86, 29.5% ROC at max, 14.8% at 50% max with 2 x expected move break evens.
UAA is probably small enough to short straddle/iron fly, with the February 18th 19.5 short straddle paying 2.42 on buying power of 3.93 (on margin), 61.6% ROC at max, 15.4% at 25% max. The risk one to make one iron fly would be a "stays within the expected move" sort of play with the February 18th 15.5/19.5/19.5/23.5, paying 2.03 on 1.97, 103% ROC at max; 25.8% ROC at 25% max.
The GPN February 18th 130/160 short strangle was paying 2.97 on buying power of 14.97 as of Friday's close, 19.8% ROC at max, 9.9% at 50% max. The bid/ask is showing wide in after hours, and I don't particularly like the five wides where I want to pitch my tent. This is probably why I haven't bothered to play it before.
Although PFE's 30-day is a bit <50%, I figured I'd price out a setup because of its high options liquidity. Unfortunately, it's not very compelling at the moment, with the 16 delta 48.5/58.5 in the February 18th contract paying a scant .89 on buying power of 6.12 as of Friday's close -- 14.5% ROC at max, 7.3% at 50% max.
Exchange-Traded Funds With Ranks >50 and 30-Day IV >35%:
ARKF (76/63)
XBI (71/45)
ARKK (70/67)
ARKG (70/65)
XRT (63/46)
KWEB (63/54)
SMH (60/41)
GDX (50/45)
Pick your Cathie Woods poison (ARKF, ARKK, ARKG), I guess. Otherwise, sell premium in XBI or (there's one I haven't seen in a while) ... XRT, although you're probably going to get more bang for your buck out of KWEB, with its higher 30-day.
Broad Market Exchange-Traded Funds, Ordered By Implied Volatility Rank:
QQQ (55/29)
IWM (54/30)
EFA (43/19)
SPY (41/22)
DIA (40/21)
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