PurelyTechnical

The following is an update to the two options picks used as illustrations in the volatility options trading strategies webinar that was conducted on Monday.

NOV - Long AUG 70.00 Straddle

The underlying experienced an inside day (whole day's action was within the range of the previous session's), today, and closed at virtually the same level that it was trading at when the straddle was illustrated. There has been some time decay, as would have been expected, and the straddle is trading at 4.00, as of today's close.

The lack of displacement, so far, calls for an alteration in the upper target, which was originally quite far away (at 84.50) and unlikely to be reached before expiration on Friday, to 77.50.

If there isn't much movement by the close tomorrow, a repair strategy might be considered or, alternatively, a rolling into SEP options.

OXY - Long AUG 75.00 Straddle

Today, OXY basically traced the highs and lows that it had made yesterday. There has been no break out of the symmetrical triangle, as yet, and there has not been a move above the 20dMA, which would have signalled a potential bullish reversal had it taken place.

A decent amount of time decay has taken place, as you'd imagine, especially considering that both (call- and put-) legs are trading at-the-money currently (at-the-money options experience the most absolute loss in time value); the straddle was priced at 2.68, at the close.

The fact that options expiration is only three days away means that time is running out and, given that there hasn't been much movement, the original targets are probably unattainable before expiration. As such, we've brought the bullish and bearish targets in, to 80 and 70, respectively.

Further updates will be provided intraday, if needed, or else at the close, tomorrow.