Money for nothing
After making record highs earlier in the week the market is taking a breather. So-so earnings from INTC and slew of earnings next week is giving folks a slight case of the jitters going into next week. The market for volatility is as soft as the market right now. The MLK holiday is putting the last smack on it.
I have ATM volatility recording 8.01 with a week to go in the SPY Jan 24 cycle. The straddle is pricing less than a 1% hold for a week. I think that is too cheap. Normally the liquidity providers take out the weekend and they have not wasted any time this cycle. I am trying to remember the last time the market moved less than 1% over a 7 day span lately, and I cannot think of one.
The idea would be to buy an ATM SPY Jan 24 Weekly 184 straddle. The 1st day will almost literally be free from decay and that is how you get money for nothing.
OptionVision™ – data from ORATS
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