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BTCUSDT: Getting hotThe price of Bitcoin is currently on an upward trend since last Thursday. BTC reached its highest point in two weeks at $43,990 before undergoing a correction. At the time of writing, BTC is trading at $43,374. Looking ahead, BTC faces a resistance level in the range of $43,870 to $45,562, which could lead to a further price drop. In the event of a decrease, the price of Bitcoin may sharply decline to a psychological support level at $40,000. If this level is broken, the next support zone will be between $38,535 and $38,574.
by TradingForecast_Signals
PTON Peloton Interactive Options Ahead of EarningsAnalyzing the options chain and the chart patterns of PTON Peloton Interactive prior to the earnings report this week, I would consider purchasing the 8usd strike price Calls with an expiration date of 2025-1-17, for a premium of approximately $1.45. If these options prove to be profitable prior to the earnings release, I would sell at least half of them. PTON might be a buyout this year. From one of these giants: AAPL, AMZN or NKE!
NASDAQ:PTONLong
by TopgOptions
Crude Oil is Primed for Gamma ScalpingCrude Oil price have remained sharply range bound for the last two months. CME Group’s West Texas Intermediate (WTI) futures have traded between USD 70-80 a barrel since early November last year. Sharply shifting supply and demand outlook explains range bound trading in crude oil. In this paper, we discuss diverging factors affecting crude oil price and illustrate gamma scalping strategy to harness returns from range bound price moves. Gamma scalping is a well-established dynamic options strategy that enables investment returns from sharply oscillating price moves. CRUDE OIL’S DIVERGING PRICE OUTLOOK Tailwinds powering the oil prices increase is fuelled by (a) OPEC+ members decisions on deep supply cuts, and (b) geopolitical risks in the middle east remains elevated. On the day of the conflict escalation, crude prices spiked 2.6% higher. Some of these attacks have affected crude oil tankers in the region risking supply disruptions. Headwinds pressing oil prices down include record US crude oil production. The US churned 13.25 million bpd (barrels per day) of oil in Q3. That is more than 3 million bpd higher than Russia (second largest producer). EIA expects strong US production to continue through 2024 with growth driven by rising well efficiencies in US oil rigs. Globally, crude production growth is expected to slow but still rise by 0.6 million bpd in 2024 with higher US production offsetting the decline from OPEC nations. Expectedly, this has led to a widening premium for Brent crude compared to WTI. Demand outlook for crude oil remains uncertain. Slowdown in demand growth remains a concern. EIA forecasts global oil consumption to rise by 1.4 million bpd in 2024. This represents a slowdown in growth compared to prior years (1.9 million bpd in 2023). Slower economic growth translates into lower crude oil consumption. As such, supply-demand dynamic may remain unchanged despite slowing production growth. NAVIGATING DIVERGING OIL OUTLOOK With both bullish and bearish drivers for crude oil in active play, a directional position in crude oil might not be able to provide intended hedge for adverse price move. In a market with plenty of uncertainty and characterised by oscillating prices, gamma scalping can be used to harness consistent gains. INTRODUCTION TO GAMMA SCALPING IN CRUDE OIL Gamma scalping is an options trading strategy in which a trader continually adjusts their holdings to profit from small price movements in the underlying, while maintaining a directionally neutral position. Gamma scalping involves dynamic hedging by continually neutralising options delta. Delta is the value by which options prices change for every dollar change in crude oil price. Gamma is the value by which delta changes for every dollar change in crude oil price. Gamma scalping profits from small & frequent volatility in crude oil prices regardless price direction. With gamma scalping, traders can gain from both upward and downward price moves. ILLUSTRATING GAMMA SCALPING IN CRUDE OIL Gamma can be scalped in multiple ways. Common among them involves establishing a long straddle which is a combination of long call and a long put using at-the-money (“ATM”) options expiring on the same date. Hypothetically, we can follow three simple steps to set up gamma scalping: Step 1: Buy (“Long”) ATM Call Option and Put Option (aka Long Straddle) At the hypothetical strike price of USD 70/barrel, premiums required for buying Straddle (calls and puts at-the-money option expiring on 14/Jun 2024) is USD 12/barrel (USD 6 each for call and put) which translates to USD 12,000 per lot. At inception, the delta should be at or near zero. In practice, delta for ATM calls and ATM puts can differ and the position may have a net non-zero delta. Investors can reference the pricing sheet on CME QuikStrike for realistic options premiums, delta values, and strikes. The gamma of the long ~0.025 x 2 = 0.05. Gamma is the value by which delta will change for each change in crude oil price. Long straddle at inception is delta neutral. Meaning, it does not have directional exposure. However, it has long exposure of 0.05 gamma which signals that delta will change when crude oil prices move. Step 2: Dynamic Hedging When Crude Prices Move Higher Consider an up-move of ten points with crude trading up at USD 80/barrel. This results in a new delta of +0.5 (due to Gamma of 0.05 and 10 point move in crude prices: 10 * 0.05 = 0.5 per barrel). This translated to delta of 500 per lot of long straddle. To remain delta neutral, trader needs to sell 5 contracts of CME Micro WTI to balance the increased delta. As a result, the overall position now consists of: • Long 1 x ATM call option with a strike price of USD 70, with expiry 14/June (LON24). • Long 1 x ATM put option with a strike price of USD 70, with expiry 14/June (LON24). • Short 5 x Micro WTI futures contract (MCLN2024) which provides exposure to 500 barrels of oil at USD 80/barrel. Step 3: Harvesting Gains via Dynamic Hedging when Crude Prices Fall Imagine crude oil prices fall to USD 70/barrel, new delta is -0.5 per barrel and -500 per lot of long straddle. To remain delta neutral, the trader needs to buy five lots of CME Micro WTI futures to neutralize delta once more. This results in a profit of USD 5,000 (sell at 80 and buy back at 70 per barrel; each lot of CME Micro WTI futures represents 100 barrels). Overall position now consists of: • Long 1 x ATM call option with a strike price of USD 70, with expiry 14/June (LON24). • Long 1 x ATM put option with a strike price of USD 70, with expiry 14/June (LON24). This trade can be executed multiple times repeating the same steps as above. If crude oil trades down to being with, neutralising delta would involve buying lower and then selling higher when prices recover. SALIENT CONSIDERATIONS WHEN GAMMA SCALPING Upfront Premiums: Long straddle requires an up-front cost. Gamma scalping will need to be executed multiple times to break even and recover the premiums. Up-front premium implies fixed downside with a well-defined maximum loss. Dynamic Hedging: Gamma scalping requires continuous monitoring and adjusting of positions. Time Decay: Options should be selected with sufficiently large days-to-expiry to minimize effect of time decay. Time decay of the option rise sharply closer to expiration massively shrinking the value of the long straddle. Long Volatility: High gamma benefits from high volatility. The strategy should be utilized when volatility is expected to rise or remain high. At Expiry: The options legs may expire at a net loss and require scalping to break-even. Example payoff analysis for different settlement prices for crude oil at expiry: 1. Settles at USD 60/barrel: The put option is US 10 in-the-money and the call option is worthless. Options P&L = USD (10 – (6+6)) x 1000 = Loss of USD 2000. Gamma scalping must have generated more than USD 2,000 to offset this potential loss. 2. Settles at USD 75/barrel: The call option expires worthless and the put option is USD 5 in-the-money. Loss of USD 7,000. Gamma scalping must generate at least USD 7,000 to break-even. 3. Settles at USD 70/barrel: The call and the put option both expire worthless; the entire up-front premium of USD 12,000 results in a loss. To break-even gamma scalping must generate at least USD 12,000. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
NYMEX:CL1!
by mintdotfinance
💡 $357 profit with 72% PoP STRANGLE - #1 trade in my challangeTrade Overview: Initiated my first options trade for the annual challenge on January 2nd with an IWM strangle. Observing high IVR in the index, I capitalized on the recent VIX spike to enter the 45DTE 212/188 strangle for 3.57cr. Trade Management: Rolling Strategy: Will roll legs as needed before expiration if price diverges. Loss Management: With a FWB:12K account, I'm capping floating loss at $200. Closing Strategy: Targeting to close around 21DTE. Trade Details: Symbol: IWM Option Type: Strangle 45DTE Entry Date: January 2, 2024 Entry Price: 3.57cr Required BP: $1681 Max Profit: $357 (20% of capital) PoP: 72% Positions: IWM Feb 16, 2024 212.00 CALL - Sell | Price: 1.76 | Qty: 1 | R. PnL: 0 | Commission: 1.251 | Fees: 0 IWM Feb 16, 2024 188.00 PUT - Sell | Price: 1.81 | Qty: 1 | R. PnL: 0 | Commission: 1.2511 | Fees: 0 Key Metrics: Tasty IVR: 42 (High) Breakevens: 184/215
AMEX:IWM
by TanukiTrade
UROY Uranium finance lease mining play LONGUROY does royalties foe uranium mining ore to refined et cetera. On the 60 minute chart, it has been on fire this week picking up 30% in market cap showing explosive volumes at 5X and sustained. The past two days have been rest and recuperation in consolidation. The zero-lag MACD suggests there is more upside in the near term with a line cross under a histogram rising from zero. The advanced RSI indicator shows a relative strength pullback from 80ish to about 65 and surprisingly the linear regression lines suggest an oversold state at present. I will take a long position here which may be risky at nearly 2 standard deviations above a rising mean VWAP and extended from the POC line of the volume profile but the supertrend indicator is showing a stepped rise and that is good enough for me. I have a new position in UEC a penny energy stock in the uranium subsector.
NASDAQ:UROYLong
by AwesomeAvani
5
ABT Abbott Laboratories Options Ahead of EarningsIf you haven`t sold the regional top on ABT: Nor reentered this fantastic dip: Then analyzing the options chain and the chart patterns of ABT Abbott Laboratories prior to the earnings report this week, I would consider purchasing the 115usd strike price at the money Calls with an expiration date of 2024-2-16, for a premium of approximately $2.26. The chart is overextended and the RSI overbought, but I think there is one more leg to go before a correction. If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
NYSE:ABTLong
by TopgOptions
1
Gapped But Not Forgotten - NIFTYAs I posted earlier in my previous post yesterday, FINNIFTY went to cover the unfilled zone on the marked levels today, successfully hitting the marked zone. Coming to the chart of NIFTY, it can be seen there are some old dues for this index to clear as well, which can be expected as early as tomorrow since the unfilled zone of 550-480 can be seen just below todays closing which shall see some activity as per previous moves. The covering of these gaps ups (& downs) has never been more exciting as a options buyer where such sharp moves can be seen forming consecutively.
NSE:NIFTY
by nikhilchhabra
Total account value: $374.50. Goal: $5,000. Follow this post. 🔥I have been practicing for exactly 1 month. Took two accounts from 200 to 600/800. But the gains did not hold up well. So I refined my strategy again and again. Time to share the journey with you as it's happening. Going to post daily updates and trade reviews in the updates of this idea. The goal is $5,000. There will be bumps in the road, but I will try to prevent major setbacks. You WILL need: Cash account. Not margin. Patience. Discipline. Take gains quickly. Stop waiting for moonshots. Will be using trend analysis, chart patterns, etc. Get hyped. Let's get this money - get ready and follow me/ this post.
SP:SPX
by kingdips
1
MDB MongoDB Options Ahead of EarningsIf you haven`t bought the dip on MDB here: or sold before the previous earnings release: Then analyzing the options chain and the chart patterns of MDB MongoDB prior to the earnings report this week, I would consider purchasing the 435usd strike price Puts with an expiration date of 2023-12-15, for a premium of approximately $23.50. If these options prove to be profitable prior to the earnings release, I would sell at least half of them. Looking forward to read your opinion about it.
NASDAQ:MDBShort
by TopgOptions
GME GameStop Options Ahead of EarningsIf you haven`t sold GME before the previous earnings: Then analyzing the options chain and the chart patterns of GME GameStop prior to the earnings report this week, I would consider purchasing the 15usd strike price at the money Calls with an expiration date of 2024-1-19, for a premium of approximately $2.63. If these options prove to be profitable prior to the earnings release, I would sell at least half of them. Looking forward to read your opinion about it.
NYSE:GMELong
by TopgOptions