This week is a good time to take a little break from the market (it’s the holiday season and volatility usually slows to a crawl and edges a little higher – it’s called the Santa Claus rally). It is a great time to own calendar spreads or my favorite ETNs (ZIV and XIV, two equities that have nearly doubled in each of the last two years).
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Terry
If the market knocks you down, try laughing instead of crying –
Some Market Definitions:
CEO --Chief Embezzlement Officer.
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Today we are going to look at what the analysts are forecasting for 2014 and suggest some option strategies that will make 60% or more if any one of the analysts interviewed by the Wall Street Journal are correct. They don’t all have to be correct, just one of the 13 they talked to.
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Terry
How to Make 60% to 100% in 2014 if a Single Analyst (Out of 13) is Right
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In case you are new to options or have been living under a rock for the past few months, you know that option prices are at historic lows. The average volatility of SPY options (VIX) has been just over 20 over the years. This means that option prices are expecting the stock (S&P 500) will fluctuate about 20% over the course of a year.
Right now, VIX is hanging out at less than 13. Option buyers are not expecting SPY to fluctuate very much with a reading this low. Since in reality, SPY jumps around quite a bit every time the word “tapering” appears in print, or the government appears to be unwilling to extend the debt limit, there is a big temptation to buy options rather than selling them.
Today I would like to share with you an idea we have developed at Terry’s Tips that has been quite successful in the short time that we have been watching it.
Terry
Interesting SPY Straddle Purchase Strategy:
For many years, Terry’s Tips has advocated . . .
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