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TP Says...
Wednesday, September 16, 2020
Want to see what TikTok does to you?  Last Friday, ORCL surged the equivalent of 3 standard devs on Thursday night’s earnings and hit an all-time-high, only to close lower on the day.  Then on Monday, it rose the equivalent of 3.4 standard devs intraday, and settled a more modest 1.84 standard devs higher on the close.  News that ORCL beat out MSFT and GOOGL to be the “trusted technology provider” to TikTok parent ByteDance seemed to be the cause of the excitement.  Now, I don’t think anyone really knows what that means.  The lawyers and the regulators and the muckety-mucks will battle over that for months.  But looking at ORCL options, its OTM calls are trading at a premium to equidistant OTM puts.  That indicates risk to the upside.  And even though ORCL’s 32% IV rank isn’t very high, its 42% IV is the highest it’s been in months.   So, an adventurous trader who thinks that there’s enough excitement in ORCL to keep it from dropping back in the next few weeks might consider a bullish strategy in it.  If you are bullish on ORCL and want to take advantage of its IV, the short 57.5 put in the Oct expiration with 30 DTE is a bullish strategy that has a 91% prob of making 50% of its max potential profit before expiry and that generates $3.04 of positive daily theta.
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