This newsletter looks an awful lot like yesterday’s issue. That’s because the trade idea yesterday was so great, we’re going to reload. The Russell 2000 Index (RUT) futures are down around 3.50 in preopen trading as of this writing, so we are making some adjustments to the strike price and the entry price. The conditions for RUT have not changed much.

From an options trader’s perspective, the volatility expectations and the fact that RUT futures are pulling back just a bit more in pre-open trading creates another opportunity for a high-probability zero-days-to-expiration (0DTE) trade.

This Volatility Term Structure for RUT shows us the implied volatility of the at-the-money options for today’s expiration continues to have the highest volatility expectations. To learn more about Volatility Term Structure, click here. This presents another 0DTE opportunity where we can enter a trade on the same day the options expire, if we are able to get filled at the right price.

This MDM graph compares the modeled expectations of current options prices (the orange line) to the actual movement of RUT’s price over the past year. You can see that the actual behavior (the blue histogram) shows us that things have not changed much from yesterday. RUT options remain expensive.

RUT pulled back a little bit yesterday. Again, the index futures are down a little in pre-open trading as of this writing, and that sets us up to reload our high-probability 0DTE trade that was so successful yesterday.
To get the details on today’s trade, be sure to read today’s ODDS Online Daily Option Trade Idea..

To access Odds Online Daily and be able to see any stock you are tracking in this software, click here.

Thank you,

Don Fishback