Before we start the strategy, here is my recent DD(Short Iron Condor) P/L from the last week.
$BABA: +$840 (expected maximum credit met)
$PFE: +$70 (expected maximum credit met)
$PYPL: -$174 (missed it but, a small portion of investment lost because of the benefit of Short Iron Condor strategy)
Total: +$740 profit
Strategy for the next week.
Because of the election last week, the market is still unpredictable, it's either another rally or it's time to crash. So I will be using the failsafe strategies for a while, and instead of the Short Iron Condor strategy, I will be using Strangle this time and I'm looking at $TIF Tiffany, Co.
Long Strangle's Benefit
- This strategy has a risk that is limited to the extent of net premium paid
- This strategy has the potential for unlimited reward
- This strategy can profit from either side move in the price of the underlying instrument, provided the move is substantial
About Tiffany, Co. (Diamond Jewelry)
$TIF is one of the lowest volatility stock, so mostly the time decay will burn all of the cash you put in, so the cost for the options for $TIF is usually cheap. And I think next week will be the only the highest volatility chance for $TIF.
So why $TIF?
- The FRB is ready for the 2nd stimulus check (another market rally possibility)https://www.thegardenisland.com/2020/11/07/news/fed-signals-readiness-to-do-more-for-economy-as-virus-rages-2/
- The election is over so a high volatility week is expected (also potential crash)
- Tiffany Says ‘Oui’ to Discounted $15.8 Billion Bid From LVMH. The Shares Are Up.https://www.marketwatch.com/articles/tiffany-says-oui-to-discounted-15-8-billion-bid-from-lvmh-the-shares-are-up-51603996836?mod=mw_quote_news
$TIF – Long Strangle: BUY 132C + BUY 130P EXP 11/20 (ONLY $12)
Breakevens at expiry: above $132.12 or below $129.88 (Strangle Benefit, you get an infinite amount of profit either it is bullish or bearish)
DISCLAIMER: if the $TIF price does not move, as usual, you lose all $12. This is why I call this a lottery ticket.
Submitted November 08, 2020 at 06:37AM by ClientSpare8405