I'm keeping VXX calls handy for a quick "go to" trade if things turn sour, or more correctly, "more sour" on the geopolitical front. With four weeks left in May expiration, May out-of-the-money calls offer the best bang for the buck, allowing for at one cycle of extreme volatility to sweep over the markets, causing VXX to soar, albeit temporarily. We are looking here for a short-term trade, less than four weeks, risking -50% to make 200% to 400% on out-of-the-money May calls. As of the first 90 minutes of trading today, VXX high print is $29.87. Buy VXX May calls on a break above $30. This is key trigger, we want to only buy VXX calls on strength, increasing the likelihood of a tradable run into into the weeks leading to expiration. VXX Hourly This morning VXX broke above both the shorter-term horizontal parallel trend channel and the longer-term downward sloping parallel trend channel down from the late March high around 40. Note the gap in the mid $30's. Expect a retrace to touch that the downward sloping trend line, then ignition, lift-off into the $30's. VXX May 15th Calls While any call on this table is suitable for a sudden bout of extreme volatility, the $35C, trading now just at about $1.00, carries the most bang for your buck. In The Wings BULL Same chart pattern, only on the Daily time frame. "In the wings," means I'm not ready to buy calls, but this chart has my attention.
