Big Week on Tap for Equity, Bond Markets
The week of July 25th not only is the biggest week for 2nd quarter earnings news, doubly important for showing how well (or not) companies fared through the tumultuous last three months as well as for how well they expect to do for the balance of 2022, but also for U.S. GDP performance for the last quarter and the Federal Reserve Bank’s decision on the degree it will increase its discount rate. Whew! This stacks a great deal of market-moving material in a compressed time period just before many take off for beaches, mountains, etc. for a much-needed August vacation.
Anytime this much news flow hits the wires volatility typically marks the only outcome forecastable with any degree of certainty. For those investors knowledgeable and comfortable using options to manage stock price volatility, weeks like this usually offer excellent opportunities to benefit from large premiums.
Even for conservative options strategies, such as overwriting core long equity positions with call options or employing cash-secured put options to either add to acquire long positions at lower price levels, we recently noted compelling premiums for select equities in Solyco Wealth portfolios. These premiums ranged from 1% to 2.8% versus near-money underlying stock prices with expirations less than one month away. Whether from the viewpoint of creating a synthetic dividend by writing a covered call or establishing a lower purchase price by selling a cash-secured put, we find such opportunities very compelling.
For more information on how Solyco Wealth may enhance your portfolios returns, please give us a call at (713) 444-2560 or drop us a message at ctrimble@solycowealth.com. Thanks!