The General Premise

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Before I begin, I wanted to mention how long I’ve been looking forward to the start of October. I’ve been lining up engineering talent to revitalize Slope and also bring some serious strength to SlopeCharts, and that all starts happening Monday. As a person who has lived his life creating products, I couldn’t be more excited about this “new era” of Slope commencing.

As far as the market, I couldn’t be less excited. This is pretty much as bad as it gets for an ursine soul like myself………lifetime highs everywhere, a raging small caps market, and a VIX in the single digits. Absolutely soul-crushing.

I’m not the sort of give up (ummm……..obviously) and I have, in fact, put together five options positions based on one simple premise. I’ll get to the premise later.

For now, let me show you the five positions in question. They all have these elements in common: (1) I own puts against them (2) the puts are in-the-money (3) the options expiration is way out in January 19 2018 (at least), giving me tons of time.

So here they are……….the Russell 2000:




Lockheed Martin:


O’Reilly Auto Parts:


And finally the Consumer Discretionary ETF:


So what’s the premise? Simple: the notion over the next three and a half months absolutely nothing of consequence will happen to equities strikes me as profoundly unlikely. These options are certainly priced for perfection and for “all quiet”.

I’m taking the opposite side: while I realize that there hasn’t been even a 5% dip in equities for twenty months now (!!!!!), it seems to me, at these lofty heights, that something………anything…………is prone to happen given a timespan of over a quarter of a year.

We shall see.