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Asymmetry in the market deals with probabilities and expectations. Probability is nothing more than a math calculation that tries to deal with uncertainty or the unknown, which is of course the future.

Volatility is low. Lower than it has been for, well almost forever. Articles are being written on how low volatility is, what it means, is this a new paradigm, etc.

Obviously this is a time to buy volatility, that should it return, could provide that asymmetrical outcome sought. My favourite target in these circumstances are yield hogs. These chaps buy high yield, mostly junk, for the returns as against say treasuries.

With volatility so cheap…you can buy volatility a long way into the future, to allow time to work in your favour, for pennies. That will be my trade on Monday when the markets re-open. My candidate is prepared.

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SRPT options are sitting at 400%+ IV. There must be an earnings [or some other announcement] that is pending.

I still have 327 shares. So I sold 3 options at $19 strike at $6.oo each option! I also sold 3 Puts at $10.oo for $2.15, as at that price, I’ll buy 300 shares of the stock. For June, this position looks to be very profitable already.

Therefore, if the stock were to drop to $10.oo [or below] I would actually purchase 300 shares at $1.75/share [less any loss below $10.oo].

While this is a very volatile stock, there is opportunity here regardless of whether you actually hold stock. Even opening a new position in the stock is feasible here with IV so incredibly high.

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Essentially two ETFs that trade the same biotech stocks, just different prices/share. IBB is more liquid [better known, heavily traded] so, its options are also more liquid. Just executed in IBB as a proxy for XBI in May 16 Puts.




Friday is an options expiry week. I only have one position that I have to roll as I have been managing the positions as I go. I would have simply rolled today, but the premium is still far to high…I would take a loss on a position that should actually be a profit.



Options expiry week, fairly lackluster as usual now. The days of huge volatility on expiry weeks seems to have gone.

A gap open of +712%. Pretty much, that could wipe you out if you were ‘short’ via common stock. Always safer, if going short, to go short by being ‘long’ a Put Option. Your losses are capped at the debit of the purchase price. Options have their own risks, but they do control this type of risk.

However, there was very strong call option activity in the stock on Oct. 14, specifically the Oct 1.5 which traded over 12,500 contracts against an open interest over 7,500. This is very bullish when we see that this a full 20% above its closing price and the option just closes in 5 business days.

Moreover, what may be even more impressive is that the call option more than doubled while the stock moved in the opposite direction closing down 3%. This undoubtedly shows strong conviction by at least some group of investors having the right to buy 1.25M shares for the next week at $1.50 that some strong upward movement in EK is likely to happen this week.

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