© Copyright 2022 eOption, a division of Regal Securities, Inc., Member
FINRA/
SIPC |
Important Disclosures
950 Milwaukee Ave., Ste. 102 | Glenview, IL 60025
The information on this web site is for discussion and information purposes only. All accounts accepted at the discretion of eOption which accepts customer orders only on an unsolicited basis, and does not make any recommendations regarding any security or securities product with the possible exception of orders executed by our full service bond desk. Nothing contained herein should be considered as an offer to buy or sell any security or securities product. Online trading has inherent risks due to loss of online services or delays from system performance, risk parameters, market conditions, and erroneous or unavailable market data.
FINRA BrokerCheck reports for Regal Securities and its investment professionals are available at www.finra.org/brokercheck.
Options Disclosure: Options involve risk and are not suitable for all investors. Prior to trading options, you must be approved for options trading and read the Characteristics and Risks of Standardized Options. A copy may also be requested via email at support@eoption.com or via mail to eOption, 950 Milwaukee Ave., Ste. 102, Glenview, IL 60025. Online trading has inherent risks due to loss of online services or delays from system performance, risk parameters, market conditions, and erroneous or unavailable market data.
eOption Commissions: Broker-assisted orders are an additional $6. Option strategies involve multiple purchases; therefore your transaction costs may be significant for option strategy trades. A commission rate of $2.00 for equities and $3.99 + $.10/contract for options, per execution, applies to orders entered and filled by eOption's Auto Trade Desk and does not apply to customers who enter their trades directly into the eOption platform and are not utilizing the Auto Trade desk.
Broker Comparison: The competitor rates from published websites were verified on 3/1/2022 and are believed to be accurate, but not guaranteed. Commissions are subject to change without notice. At some firms, commissions may not reflect broker-assisted fees, orders over 1,000 shares, penny stock trades, OTCBB, pink sheet stocks or foreign stock orders. Firms may offer reduced commissions if additional criteria are met.
Blog & Commentary: eOption is neither affiliated with, sponsored by, nor endorses commentary and the opinions expressed are solely their own. Content is provided for educational and informational purposes only and eOption cannot attest to its accuracy or completeness. No information provided has been endorsed by eOption.com and does not constitute a recommendation by eOption to buy or sell a particular investment. You are solely responsible for your own investment decisions, and eOption makes no investment recommendations and does not provide financial, tax or legal advice.
No Trade War Threat – Trump Is Running On A Strong Market [Use This Options Strategy]
www.1option.com
The market has successfully confirmed support at the 200-day moving average and is likely to trade in a range while we wait for earnings season. Buyers are typically engaged ahead of the announcements and I am expecting a slight upward bias. We still don’t know the bottom line damage from the shutdown and we don’t know if consumer behavior will be impacted by the latest spike in new cases. We are in a news vacuum and the SPY should stay between $297 and $322 for the next few weeks.
The overnight price action in S&P 500 futures was exciting and comments from Peter Navarro spooked buyers. His statement was misconstrued and it sounded like US/China trade relations were strained. President Trump has done everything he can to prop up the market and he won’t do anything to jeopardize that heading into the November election. No matter what you hear, if the policy rumors are bad for the market they are not true. One of Trump’s re-election battle cries has been the strength of the market since he took office and the 401(k)/IRA wealth that is been created.
We can expect unprecedented money printing from the Fed and we can expect government stimulus (infrastructure bill, unemployment benefit extensions and small business loans) through the election. Democrats don’t want to look like the bad guys so they will also support these policies.
The spike in Coronavirus cases is largely due to increased testing. The percentage of infections is stable around 6.5%. This “spike in new cases” has dominated the national news and people are cautious (in most instances). Social distancing and facemasks will help to contain the spread and this practice needs to continue. This resilient virus will curb consumer spending and that is likely to prolong the economic recovery. Consumer spending is the missing puzzle piece and we should have more clarity in a month.
We are in a news vacuum and the trading volume will be light. This is typically a slow time of year and it is referred to as the “summer doldrums”.
Swing traders should remain in cash and they should be ready to sell out of the money bullish put spreads on strong stocks when we get a market dip. These pullbacks won’t last long and you need to act quickly. Yesterday I posted a YouTube video and I like selling the WMT July (02) $117/116 bullish put spread for $.15 credit. The stock is above the major moving averages and it has broken the downtrend line on a daily basis. WMT has benefited from the Coronavirus because it was deemed essential and WMT was able to keep stores open. Online sales have also been robust. I also like that the stock has not gone parabolic. Even if the virus gains momentum I believe this stock will be able to hold major support. Option implied volatilities are generally elevated (all stocks) and I like selling out of the money bullish put spreads. Market support has been confirmed and SPY $300 will hold. Don’t chase stocks, wait for pullbacks. I would favor bullish put spreads on tech stocks since the sector has been leading the rally. Avoid the laggards.
Content is provided by OneOption, LLC, which has no affiliation with Regal Securities, Inc. (“Regal”) This commentary is provided for information purposes only, and is not a recommendation, offer or solicitation by Regal to buy or sell securities or to adopt any investment strategy. Regal has not participated in the creation of the OneOption content and does not directly or indirectly endorse the content. Any reliance on this material is at the sole discretion of the reader.