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TP Says...
Tuesday, October 20, 2020
I’ve been following politics and elections since 1976 or so, after I decoded the “WIN” stickers (“Whip Inflation Now”).  It was also when I started phasing out Mad magazine, a decision I often regret.  But this 2020 race, with its rancor and rage, has me recalling Alfred E. Neuman’s signature phrase, “What, me worry?”  Think about it.  Combine all the people yelling about the election on TV, TWTR, FB, etc., and it’s still a small percentage of our 330 million population.  Their bark is likely worse than their bite.  That longish view of politics has me thinking that the actual election will be less eventful than what the small percentage hopes for.  That could be true for the market, too.  Speaking of uneventful, IWM has been flat over the past couple weeks as it seems to be waiting for Nov 4 before it makes a move higher or lower.  That’s why its IV is still 35%, high enough to make short option strategies interesting.  If you think that IWM won’t move much in the next few weeks, you might consider a neutral strategy to take advantage of its IV.  The short iron condor that’s long the 146 put, short the 148 put, short the 175 call and long the 177 call in the Nov weekly expiration with 38 is a neutral strategy that collects a credit that’s 1/3 the width of its strikes, has a 75% prob of making 50% of its max potential profit before expiry, and that generates $1.02 of positive daily theta.
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