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Keep an eye on CFC as it drifts lower, slowly towards 23.5, it’s 52wk low. There are a few ways to play this underlying.
- Straight put (I lost on that the very first time I talked about this)
- Bear call spread, the losses are limited (you may choose to open Aug 27.5/30 bear call spread, $0.45 credit for $2.05 margin, for 4 days holding). I don’t expect any major news coming out in next 3 days (but there is always a remote possibility)
- Open a put diagonal (the beauty of this trade is that with IV rise, value of PUTs will increase, and with stock’s fall, value of puts will increase as well). However, if stock crashes for some reason, u r open to risk unless you hedge it.
- OOM put calendar. You may choose a strike you like or you think is a possible pinning point.
Choose whichever strategy you like, there maybe more, but be careful. High IV means high risk as well. Just like it bounced back when i suggested last time, it may revert again as well. But hey, who said the life was so easy. If it were, neither I was writing, nor you were reading this 🙂
Cheers and profitable trading, OP
Disclaimer : I have a bearish position on CFC.