THE WEEK AHEAD: TGT, BBY, LOW, XRT AND THE VIX
With earnings in TGT, BBY, and LOW, it's no surprise that implied volatility in the retail ETF, XRT, has ramped up here a bit (sixth month implied volatility rank is 73/implied volatility is 22).
That being said, I'm really only looking at BBY for a play given its implied volatility rank/implied volatility (93/48). HTZ also announces earnings and has the right metrics for a play, but has 2.5 wide strikes where I'd want to set up, so I won't be playing that. TGT and LOW's background implied volatility probably will not be sufficient for me to play (they're in the high 20's/low 30's; I prefer something around or above 50).
Relatedly, however, XRT is starting to "frisk up", so I may consider putting on a fly there if I can do a setup that brings in 1/4th of the width of the long options.
Additionally, VIX spot hasn't moved significantly, but back month VIX futures options have ticked up a bit such that you can get in on a term structure trade in VIX in the May expiry at the 16 strike for a decent credit (e.g., May 16/19 short call vert).
And that's what I'm looking at for the week ... .
That being said, I'm really only looking at BBY for a play given its implied volatility rank/implied volatility (93/48). HTZ also announces earnings and has the right metrics for a play, but has 2.5 wide strikes where I'd want to set up, so I won't be playing that. TGT and LOW's background implied volatility probably will not be sufficient for me to play (they're in the high 20's/low 30's; I prefer something around or above 50).
Relatedly, however, XRT is starting to "frisk up", so I may consider putting on a fly there if I can do a setup that brings in 1/4th of the width of the long options.
Additionally, VIX spot hasn't moved significantly, but back month VIX futures options have ticked up a bit such that you can get in on a term structure trade in VIX in the May expiry at the 16 strike for a decent credit (e.g., May 16/19 short call vert).
And that's what I'm looking at for the week ... .
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