Market is Crashing and Our Hedges are Thrashing

Market is Crashing and Our Hedges are Thrashing
OPTIONS

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 turn here and continue to go lower then traders will want to utilize Call Debit Spreads. Our hedges from last week are needing to come off now.

THE DARWIN OPTION PICK FOR TODAY IS MGM

MGM 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 $26.00 Call and $26.00 Put on MGM with an expiry date of 06/07/2019 and unwind the trade when either our upper or lower targets are hit near $29.00 and $23.00, respectively. MGM Resorts International is a holding company.

Trade smart,

Paul "Bulldog" Hudson, Chief Investment Officer
Darwin Investing Network