Posted in
Current Events
By: Tom Gentile
on January 5th, 2022
Objective
Hi everyone. This article going forward is me just quickly touching base with you on what I see going on in the market that might be a way to educate you further on what I see, how I assess what I see and if there is options education I can provide you because of it.
The plan is to offer up a simple bit of education on what I see might be of interest from an options trading perspective, or a means to quickly assess what might be going on with the market due to a financial event, either domestic or international, that may affect the market for good or for bad.
Today’s lesson on Options with Expensive Implied Volatility (IV)
Take a look at the image from my software suite of options analytical tools (www.tomsoptiontools.com) which shows 10 stocks with Expensive IV:
My view on Peloton Interactive (PTON)
The stock second on the list is Peloton Interactive, Inc. (NASDAQ: PTON). PTON is an example of a stock NOT to trade options on from a ‘going long’ or ‘buying yo open’ perspective.
PTON News
The news on the stock today is that it is having its price target but NY one firm, it is at a 52-wk low in price and other reports are stating there is weakening demand for its products and services.
It might seem worth going long puts you say? Maybe. But the fact it is on the Expensive IV list means the options are pricey and if there is a pullback in the IV itself, regardless of what the stock price does, that could cause a loss in the premium of the option you may be in.
Options Trading Lesson
For the most part any stock on the Expensive IV list is one I would not buy options on for the education I just mentioned. When IV comes out of the option premium that could cause losses one doesn’t want and the stock really has to work harder to overcome the decline in IV.
App: Toms Option Tools
The list you see in the image of Expensive IV and other lists with different Options Classifications can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app. Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.
