VIX MARKET ANALYSIS
Currently the VIX is below $25. Usually this means trades like Gamma Scalping become optimal. If you feel the VIX is going to go up then use Put Debit Spreads. However if you believe the VIX will stay this low and continue to go lower then traders will want to utilize Call Debit Spreads. Aggressive traders could look to use Victory spreads to anticipate a move higher in VIX. Easily up to $16.
THE DARWIN OPTION PICK FOR TODAY IS PHM
PHM has been throwing off an Darwin Option alert that a big move could be coming, with realized vol being greater than implied vol right now. The best option play currently is to build a straddle considering that volatility is low. Traders will find an at the money $28.00 Call and $28.00 Put on PHM with an expiry date of 04/12/2019 and unwind the trade when either our upper or lower targets are hit near $31.00 and $25.00, respectively. PulteGroup, Inc. is a homebuilder in the United States.
Paul "Bulldog" Hudson, Chief Investment Officer
Darwin Investing Network