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TP Says...
Tuesday, June 2, 2020
Somewhat surprisingly, despite the unrest over the weekend, when justified protesting gave way to miserable rioting, the market was quiet yesterday.  The S&P 500 managed a small rally, and the VIX gave up its little bounce to close slightly higher.  Apparently, the market figures this won’t be any more economically disruptive than COVID-19, particularly as law enforcement begins to come to grips with the situation. So, maybe protesters will be given space to state their case, and rioters, not so much.  That would leave the market to continue to drift through the summer until the elections start to gain steam.  IWM’s IV is lower than it was earlier this spring, but still high enough to make its options interesting short premium candidates.  If you think IWM will trade in a range for the next few weeks, the short iron condor that’s long the 123 put, short the 125 put, short the 155 call and long the 157 call in the July expiration with 45 DTE is a neutral strategy that collects a credit 1/3 the width of its strikes, has a 72% prob of making 50% of its max profit before expiry, and that generates $1.01 of positive daily theta.
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