Well today was a very interesting day for volatility traders. For those of you that got short vol earlier this week, great job! Volatility got crushed today with this snap back rally. The VIX fell by more then 10% today, it was a great day to be short volatility.
I had some short vol positions that I set earlier in the week, CHK being one of the biggest position and being one of the biggest winners today. Monday I sold the July 14 put for $1.00 and closed it today for $.39. I also took off my EEM trade, and the reason behind this is that I feel EEM would have tested me on my July 40 call I was short. Instead of letting that happen I decided to buy back my spread for a tiny profit.
I did however open a few more spreads today both being strangles on IWM and FSLR.
FSLR is a dog and I know this, but juicy with implied volatility. I sold the 10 put and 17 call for a credit of $1.01. The chart is pretty neutral and I think we could see some nice side ways action for the next week or so, driving some of the premium out.
IWM implied vol as not gotten too high with the recent pullback, but I think we could see a 5% pull back in vols. The chart has me thinking two things, first is that we have some overhead resistance at around 78. If we can get to that resistance level a lot of the fluff will hopefully come out. The second opinion I have on the chart is that we could see some weakness off the downtrend line back to the 72 area. Either way I think we could have a great trade here.