John Carter on Directional Plays and Creating Positive Theta

John Carter discusses some new ideas with directional plays along with tips on creating positive delta hedging with a play in TLT.
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John Carter discusses some new ideas with directional plays along with tips on creating positive delta hedging with a play in TLT. Coming into options expirations on Friday, Carter lists strategies for hedging. The first stock he likes is Buffalo Wild Wings (BWLD), because it has good volume and nice break out. He wants to make a directional trade with theta positive. In order to get theta positive he sells 95 of the 160 puts and buys 155 calls for July. This is a purely directional trade, so if the stock goes down the investor must get out, and if the options go sideways the investor will lose money. Another stock Carter likes is VIPS, and he suggests buying calls and selling puts to offset theta decay of this high volatility stock. Carter says the bond market looks like it is going higher. To hedge he suggests buying calls on TLT, because TLT will go higher as the stock market goes higher and go even higher as the market goes down.¿

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