TBT is looking very interesting down at these levels, I would be a buyer sooner than later on this one. I think its easily back to $32 in a few week on this one.
Just ratio the upside,i.e the Dec 31/40 1x3 for a 50 cent debit..the upside calls are trading at a 40% plus vol..On the next rally,they will go down as the air comes out of the vol..
At these levels,I want to be long delta and short vega to the upside. I am hoping to make dollars,and the put spreads are trading for 1 dollar
Looks like another "opportunity" to enter long today. New lows in TBT for sure....could we get to 27 ? It's obvious now the economy has over-shadowed any concerns about debt downgrades or defaults.
Thats why a low debit spread with time is really the best play.With a Dec spread,you dont have to have perfect timing.
Of course.....but I prefer "quicker hits". That is why options are so nice....lots of flexibility to accommodate risk tolerance and preference.
OK, guys....now what do you think in light of the downgrade ? Pop on Monday at the open and then a fade ? That's my call. This economy is still way too weak for higher interest rates. QE3 coming soon. Definitely by Christmas.