I want to characterize yesterday with movement.? AAPL traded from 441 to 422, GOOG traded from 894 to 916 and PCLN from 789 to 808.? Stocks are moving again and I alluded to that Monday that the realized volatility for names is starting to pick up.? VIX managed up .04 but really the story is that stocks are moving and the reason is money is coming back into the market. I think this means that things that really were not possible with positions most of last year are possible now.? You can buy some options and have a shot at making money.? Let?s look at a stock in the basement, ZNGA.
Realized volatility in ZNGA over the last 60 days is 64%.? Even in the last couple of weeks ZNGA has managed some decent ranges.? The last couple of days have been 8% moves intraday.? Today the name broke $3.6 for the first time in a while. The interesting story is not that some hedge funds are buying, which is good, but that the IV is still in the mid 50% range for a good distance out.? If you look at the OptionVision 3D chart below there is some buying in the OTM calls in Sep.? Crazy right? A stock goes up and the longer term IV goes up.? If you own some ZNGA, that is a good sign. 
For more on OptionVision go?here
The May IV is getting crushed as most folks are looking to other months.? That is fine but the 5x relative volume in the near term is a healthy sign.? Some bucks are coming into the name.? The old adages of options are only meant to be sold or not sold is mostly true and buying options on balance is pretty difficult. The flip side is that option don?t get much cheaper than they are now which means you could be sitting on your hands for a while.
The Trade
Buy straddles ATM in ZNGA in the July and further out terms.? If the market keeps doing what it?s doing, they will be ITM straddles soon enough. If you can’t trade long gamma ?just calls will suffice. ?In general we like owning gamma in the bigger names.
I have ZNGA positions.
If you want to learn what all this means- This is the type of information we will train you to analyze in our?gold course. ?If you needed help following this trade, you should be in that course. ?Call us at 888 Trade 01