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VECO designs, manufactures, markets and services enabling solutions for customers in the high brightness light emitting diode (HB LED), solar, data storage, scientific research, semiconductor and industrial markets.
I found this stock using a real-time custom scan. This one hunts for low vols.
Custom Scan Details
Stock Price >= $7 >= $70
IV60™ >= 1
IV60™ - HV60™ <= -8 >= -40
HV180™ - IV60™ >= 8
Average Option Volume <= 1,200
Industry != Bio-tech
The goal with this scan is to identify intermediate-term implied vol (IV60™) that is depressed both to the intermediate stock movement (HV60™) and the long term trend in stock movement (HV180™). I'm also looking for a reasonable amount of liquidity in the options (thus the minimum average option volume) and want to avoid bio-techs (and their crazy vol).
The VECO Charts Tab is included (below). The top portion is the stock price, the bottom portion is the vol: IV60™ - yellow vs HV60™ - blue vs HV180™ - pink).
We can see:
IV60™: 38.41
HV60™: 67.13
HV180™: 68.14
So, IV60™ is substantially depressed relative to the intermediate term and long term realized movement of the stock.
Finally, let's look to the Options Tab (below).
Possible Trades to Analyze
I think it's a reasonable bet that VECO moves away from $38 in the next month and a half. Any call or put spread that has MaxGain:MaxLoss better than 1:1 seems ok. Similar bets in Nov also seem reasonable.
Stuff like:
For delta bets:Nov 36/38 put spread, Nov 38/40 call spread.
More pure vol: Creative Dec spreads (maybe even 1x2).
It's nice that there are a lot of strikes here for some creative spreads, but don't "commission yourself to death" getting too complicated and trading too many strikes.
This is trade analysis, not a recommendation.
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Is creative designating a specific scheme like stupid? or is it plain english?
ReplyDeletethanks a lot
That was just plain English. By creative I mean constructing a spread where you feel the payout is > the odds against.
ReplyDelete