VIX MARKET ANALYSIS
Currently the VIX is below $25. Usually this means trades like Gamma Scalping become optimal. If you feel the VIX is going to go up then use Put Debit Spreads. However if you believe the VIX will stay this low and continue to go lower then traders will want to utilize Call Debit Spreads. Aggressive traders could look to use Victory spreads to anticipate a move higher in VIX.
THE DARWIN OPTION PICK FOR TODAY IS CAT
CAT has been throwing off an Darwin Option alert that a big move could be coming, with realized vol being greater than implied vol right now. The best option play currently is to build a straddle considering that volatility is low. Traders will find an at the money $125.00 Call and $125.00 Put on CAT with an expiry date of 06/14/2019 and unwind the trade when either our upper or lower targets are hit near $137.00 and $114.00, respectively. Caterpillar Inc. is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.
Paul "Bulldog" Hudson, Chief Investment Officer
Darwin Investing Network