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Should We Anticipate a Long December?


Sticking to spreads in these modest dips may help pass the time -- a little.

If we've learned one thing this week, it's that pre-anticipating pins rarely works well. See Reviewing Four Tech Stock Pins.

Even with yesterday's mini excitement, it's still not a volatile week. Yet of the stocks we've highlighted this week, most flipped toward a strike that looked unlikely as recently as Tuesday night.

And keep in mind, it's not like we crashed, SPY was down all of 1.27% yesterday.

But we're not here to talk about the past. It's time to start pre-anticipating December volatility carnage!

Well maybe. I noted the other day that when I ran numbers for my book, December pops out as the month where options consistently overprice "reality" by the widest margin. Keep in mind options almost always price higher in volatility terms than stocks actually move, it's just more pronounced in December.

Of course price matters too, and with index volatility hovering near 52-week lows, and many individual names trading at 18 month lows, it's tough to pull the trigger too aggressively on sales. So I'm sticking more to spreads, shorting put spreads for the most part into these modest dips.

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