The market was deciding what to do yesterday after making the big volatility crushing run to SPX 1885.52 on Tuesday. ?I can give it a day of rest even for a hyper active bull. ?The momentum drivers were a little slower yesterday, so that might be part of it. ?Lackluster employment data, of which there seems no end, and other mixed data have us pretty flat so far.
Looking for some bigger volume on a slow day brought me to BWP. ?Boardwalk took a big fall in February and has been on the comeback trail for most of the last 6 weeks. ?This from a stock in the 30’s in 2013 only to flop to the 12 handle at the beginning of the year. ?I track this one and the paper in here has been pretty good through this move.?
Livevol (R)?www.livevol.com
Livevol (R)?www.livevol.com
Right now paper looks like they are rolling some calls up. ?Sellers of ?Jun to ?Sep, but they are buying the 15s on money they have already made when BWP was in the basement. ?The IV level does not look too bad for a buy write since most of the bad news seems to be behind it.?
The Trade
A BWP May/Sep 15 call time spread is a decent way to get long. ?You could sell the Sep 10/12.5 put spread against and have the call for tiny dollars if the trajectory holds up. ?A buy write for those that want the full equity exposure.