Where have all the income trades gone?
 Really, what I am saying is where have all the IC's gone? Where is the balance of yeild given the risk in this current market? Although I can go wide, it just doesn't seem worth it for, say 8%.
These are turbulent times. Although I am happy with my call credit spread on the RUT, I am not able to find any other income trades that seem the warrant the risk.
I am considering just adding to RUT position if I we get some strong upside movement.
Although some butterflies are tempting, they are really meant to be used in consolidating stocks - Which stocks are consolidating in this market?
RIMM and CROX look like they are ready to bust higher, but I don't want to be writing Put credit spreads. Bank & financial stocks look like going lower yet the yield on any call credit spreads is very poor even given the volatility.
The ANF 85/90 Call Credit spread looks promising on the charts, but according to the 1SD band, still represent a big risk.
GOOG is at an IV low for the year, but I don't want to bracket a stock like that with an IC in this market.
OIH maybe a candidate for and IC? I am also looking at the XAU, and TLT but with interest rate changes likely, I may steer aware from TLT.
Given the recent volatility, those 1SD bands in general look too close for my liking.
Is anyone else having any luck with income trades this month?
I don't think I am alone either: What to do
Maybe I'm looking in the wrong places? Trades that worked (or at least looked promising) last month are not there and I need to look elsewhere. I am simultaneously starting to think I should not be pushing it, trading is a business and risk management is important.
August 27th, 2007 - 04:48
Hi Dave,
I am playing some call credit spreads, and I have some IC’s I rolled from last month which are in good position right now with the upward movement. I so agree regarding the 1 SD not looking safe enough! Although, I am happy to see the VIX down near 20 again. Let’s hope for another calm week leading up to the Labor Day weekend. My gut tells me we have priced a Fed cut already, and this cut may not happen if we continue to get positive economic indicators like last week. I am very nervous about the Sept Fed meeting, and will try and close some trades out prior to be safe.
Cheers!
Chad