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Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

The Cherry Bomb
October 10, 2019
FXI, the ETF that tracks Chinese equities, has been stuck in a range for the past two weeks.  It seems like it’s getting tired of the tariffs and trade talks and is trying to figure out where to go.  Not even the NBA could move the needle.  But its IV, while not exactly high, isn’t as low as it could be.  FXI’s IV percentile is at 48%, which puts it in the middle of the number of days in the past year IV’s been higher and lower than its current level.  That makes it just on the edge of a short premium strategy, and short verticals in FXI have decent credits.  If you think FXI might continue to trade in a range for the next few weeks, the short iron condor that’s long the 36.5 put, short the 38.5 put, short the 42 call and long the 44 call in the Nov weekly expiration with 43 DTE is a neutral strategy that collects a credit 1/3 the width of the strikes, has a 74% prob of making 50% of its max profit before expiry and that generates $.83 of positive daily theta. 








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Tom Sosnoff
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