Buffett is Nervous, Food Crisis Looms, You Need to Understand & Trade Strangles Like This | tastylive Weekly Roundup
Buffett is Nervous, Food Crisis Looms, You Need to Understand & Trade Strangles Like This | tastylive Weekly Roundup
By:Eric Villa
Our best stories on YouTube this week.
- Errol Coleman decides between trading stocks, options and futures.
- Warren Buffett is selling, so what does he see?
- You may be losing money if you trade strangles like this.
- Traders need to pay attention to this potential food crisis
Stocks vs. futures vs. options battle royale
Stocks, options and futures can offer traders and investors wildly different opportunities and risks. To understand which product may be best for traders with all levels of experience levels and under any market conditions, Errol Coleman led a roundtable discussion that included Chris Vecchio CFA, Dr. Jim Schultz and Garrett Baldwin.
Warren Buffett’s Berkshire Hathaway is at all-time highs … for now
Frank Kaberna recently conducted an analysis of Berkshire Hathaway's (BRK.A) holdings. Despite the firm's price nearing an all-time high—which may suggest Warren Buffett feels confident—there are indications he is reducing risk in anticipation of a potential stock market downturn. Is it possible Buffett believes the 2023 stock rally is too good to be true?
What is the perfect strangle strategy?
The research team at tastylive has compiled a study of the most statistically advantageous methods of trading strangles. Here are some highlights from this research piece that could potentially enhance your trading strategies:
- Historical analysis shows 16 delta strangles at 45 days to expiration tend to have higher win percentages, median profit and loss (P&L), and initial credits. However, the optimal range for days to expiration is between 45 and 90.
- The delta of the strangle also affects its performance. As the delta increases, the win percentage decreases, but the median P&L and initial credit increase. The 20 delta is considered the optimal choice based on win percentage and median P&L.
- IVR (implied volatility rank) is important in determining the suitability of a strangle. Higher IVR environments, ideally above 30 or even between 50 and 75, tend to yield better results. However, extremely high IVR values above 75 are rare.
- The recommended strategy is to use 20 delta strangles with 45 days to expiration because they provide a balance between probability of profit (POP), P&L and premium collected. It is essential to consider personal risk tolerance because some traders may be willing to accept a lower win percentage for a larger credit.
Is a food crisis nigh?
Inflation may be cooling down, but global forces won't allow the inflationary magma to solidify without a struggle. Ilya Spivak dissects the next potential global inflationary force—a looming food crisis. Here are the salient points from his insightful discussion of the potential food crisis, as linked above. Traders, take note and strategize accordingly.
- India's decision to ban the export of some varieties of white rice has raised concerns about a potential food shortage. This comes at a time when the Russia-Ukraine war are already raising concerns about wheat, fertilizer and corn shipments.
- The spike in stories mentioning a "food crisis" suggests growing concern about the issue in the markets.
- The breakdown of the Black Sea grain initiative between Russia and Ukraine, along with other geopolitical tensions, has the potential to disrupt food supply chains and contribute to food inflation.
- Rice prices have been on the rise, with India the largest exporter. A significant increase in rice prices could complicate global disinflation efforts and lead to more hawkish central bank actions.
- While there are concerns about a potential food crisis, it is important to note that India's measures are preemptive and there is uncertainty about the impact on rice production. Additionally, the global impact of a potential food crisis may be limited to specific regions like the Middle East or Africa.
Eric Villa is a YouTube specialist at tastylive.
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.
Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.