27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Chatting with Benzinga, TD Ameritrade Chief Strategist JJ Kinahan looked into options activity in a few stocks ahead of earnings.
First off, he went into Apple Inc. (NASDAQ: AAPL), where the firm has been seeing pretty big buyers of the July (weekly) $135.00 calls over the past couple of weeks. He noted there wasn’t much more to get excited about here. Same is the case for EMC Corporation (NYSE: EMC), he added, as options activity is “way out.”
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The strategist then looked into Microsoft Corporation (NASDAQ: MSFT), which is seeing implied volatility of 90 percent, compared to its historical volatility of 11 percent. So, “the options market is predicting a much bigger move than the stock has done recently,” he explained. Investors are expecting about a 4 percent move, which is huge for Microsoft.
Kinahan told Benzinga he is not sure about the reason behind the increased implied volatility, but highlighted that his firm has been seeing plenty of activity in August recently; particularly, some buyers in the $48.50 calls and the $44 and $42 puts.
The expert then talked about Yahoo! Inc. (NASDAQ: YHOO), which has priced in a 5 percent move.
Yahoo! is usually a “decent” options trader, Kinahan added. The activity is more on the September line, he suplemented. “What’s interesting is that we’ve seen sellers of the September $45 calls (…) and they have been pretty consistent all morning,” he assured.
On the shorter-term, the firm has seen some sellers of the July $38 puts.
Finally, VMware, Inc. (NYSE: VMW) priced in a 5.7 percent move, but, once again, is not a big options trader, the expert concluded, although he saw some activity in the July $80 puts on Tuesday.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.