Another Bob!

Hi Shoppers,

So one of the inconveniences of the lockdown, for us girls, is getting our hair done. You know, cut and color.  

I ended up leaving my “beauty operator” (that’s what my Grandma called it and my sister and I always thought that was so funny) in the city for a more convenient and OPEN hair dresser in the burbs.  

As you all know, leaving your hairdresser is like breaking up with a boyfriend; it is not easy, especially after fifteen years!

I was ready for a change because she just kept giving me a bob or some variation of a bob.  I just wanted to go short.

There is a quick trading tip that I want to show you today, that relates to getting our hair done…

Ladies, what do we always do before our hair appointment?  

We look at TONS of pictures of haircuts and hairstyles.  Online, Pinterest ($PINS) has loads of hairstyle pictures.

$PINS also has some cheap options for sale!  

So Let’s go shopping!

Once I know what I’m diving into, I immediately like to look at the implied volatility of the options vs the stock volatility.

The implied volatility of the options are at 60.59, and this is way lower than the stock’s historical volatility which is at 115.97.  I like this set up for buying cheap options.

Even though $PINS is near its high, I think it could trade there again and trade there again soon.  

So, I am choosing a call spread in the Nov20 expiration cycle which also keeps it cheaper.

Remember, we do not want to pay extra for the extra time, if we don’t have to.

I like buying the Nov20 $62 calls with implied vol of 61.00 and selling the $67 calls with a 65.64 implied vol.  

On the floor I’d be saying, “buying the Nov20 62/67 call spread paying $.95”

Since $PINS is near its high, I am going to keep my stop loss tight and sell the spread if it trades down to $.65.  I would sell the spread on the upside in the $2.00 area.

I finally had my hair cut and colored by a new guy and of course he gives me a BOB!!  GRRRRR…

Thanks for reading…See You Next Tuesday!

P.S. – One of the amazing trading services I help run for us at OptionPit is called Sharp B.E.T.S. The basis of the strategy is around what I highlight a lot here with looking at “vols.” We’ve been on a recent run lately up over 300% in the month of October. Mark agreed to open it back up while we are on our run so get in while you can. Grab it here.

Leave A Response

* Denotes Required Field