Options Strategies for Volatile Markets - RKLB, Archer, Ford & CRSP

 

Welcome, traders, to another week of navigating the market waters! This week's been a rollercoaster, and with volatility on the rise, it's prime time for strategic options plays. Here at Sharkwater Trading, we're keeping our eyes peeled for opportunities and wanted to share some insights on a few tickers:

Long Calls on the Future of Flight:

• RKLB (Rocket Lab): This space innovator is making waves in the launch industry. We see potential for long-term growth, and with a January 25th, 2025 expiry (12.17 calls), we can leverage this volatility to our advantage.

• Archer Aviation (ACHR): The electric vertical takeoff and landing (eVTOL) market is poised for disruption, and Archer Aviation is a key player. Long calls with a similar timeframe (Jan 2025) could be a strategic way to capitalize on this potential.

Bullish on Ford (F) with a Twist:

While we're bullish on Ford's long-term prospects, the current market climate demands some hedging. We like the 12.17 January 25th calls (similar to RKLB and ACHR), but to add some protection, consider a diagonal debit spread. This involves selling a slightly out-of-the-money (OTM) call with a closer expiry to generate some premium that can offset potential losses.

Rapid Covered Calls for Short-Term Gains:

This week's volatility presents a great opportunity for covered calls, especially on stocks experiencing significant swings. Here's an example:

• CRISPR Therapeutics (CRSP): CRSP has been volatile this week. Consider buying 100 shares of CRSP and selling a covered call with a short expiry (perhaps expiring this week or next). This allows you to collect premium while still capturing some upside potential if the stock price rises. However, if the stock price goes significantly higher than the strike price of your call, you'll be assigned early and miss out on those additional gains.

Remember, these are just examples, and it's crucial to do your own research before making any trades. Consider factors like your risk tolerance, investment goals, and overall market conditions.

Stay tuned! We'll be back next week with more options strategies and insights to help you navigate the ever-changing market landscape. As always, swim smart and trade safe!

Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Please consult with a financial professional before making any investment decisions.