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The Best Time to Own Options Is Now


But keep in mind -- they're only worth owning into next week.

The best time of year to own options is right about now.

Seriously, by one measure I used for my book, I compared median/mean implied volatility (IV) for each cycle to typical realized volatility in the SPX for that same cycle.

I don't want to be too specific -- because I'd rather you buy the book and then be underwhelmed by my methodology. But if you've survived the July cycle volatility melt, you're now at a point where options come closest to fair pricing for the stock volatility about to come. Options always overprice relative to stock volatility, but the second half of the July cycle is the lowest overpricing of the year.

Now that doesn't mean you should go buy everything. I must add some caveats. Earnings season has moved back a bit. Whereas 5-10 years ago, a bevy of companies reported before July expiration, many have now moved to the first or second week of the August cycle.

So if you buy, stick to August options. And keep in mind that they're only worth owning into next week, since the next "event" is expiration, and options of the next cycle out start caving right before the previous expiration.

So to sum up, I'd say options volatility should hold steady to stronger over the next one-2 weeks as stock volatility likely picks up
No positions in stocks mentioned.
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