Several Plays With Potential Volatility
Now we wait for the jobs number. Expectations are clearly high, but I think they are too high. However, I find the opportunity in the long bond rather than short equities. Long bonds have been sold down hard and if I am looking at an opportunity for an aggressive play into tomorrow, I would use iShares Barclays 20-Year-Plus Treasury ETF (TLT). I'm a buyer of the March 8 $116-$117-$117.50 skip-strike-call butterfly for $0.26 to $0.29. I wouldn't pay more than $0.33 because I want the risk-reward at a two-to-one clip, so at least $0.66 profit potential for the $0.33 or less risk.Pandora (P) Source: StockCharts.com View Chart » View in New Window »
A few earnings plays should bring volatility and maybe a potential trade. Pandora (P) is still trying to figure out how to be profitable. Regardless of its plans, Pandora needs a strong partner or a takeout. This is a highly competitive area of business and I just don't see Pandora turning the corner yet. The chart is set up with a wide wedge formation, which often acts as a prelude to a big move. Options are pricing in about a $2 move or 16.6%, which is quite possible given the 22% short interest. There is a lot of call action in the stock today, but I believe it more driven by shorts simply hedging positions into earnings. I've taken a small March $12-$10 put spread position at an average cost of $0.835....83 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.
Already a Subscriber? Please login.