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When everything feels overpriced and I can’t find a good entry — long or short — I look for cheap ways to hedge. That’s exactly where I found myself Wednesday…
I didn’t love anything in either direction, and when that happens, I go back to the basics. For me, that means bonds.
Specifically, I bought the June monthly expiration, $86 strike calls on TLT.
TLT has been getting crushed lately. It’s at rock-bottom levels, which is probably the worst logic to have — “It’s down so much, so I’m gonna buy it” — but I like having some protection in my portfolio when tech is flying, the VIX is flat, and the market feels ready to rip higher or fall apart.
Why Bonds Make Sense Right Now
This wasn’t a massive position. I’m still not trading size. I’ve been keeping it light — no more BIG trades unless I really love something. Today’s action didn’t give me that.
But TLT was just sitting there. It didn’t move much. It hasn’t been rallying with the rest of the market, and if we do get a shakeout — especially with how tech has been acting — bonds could catch a bid.
That’s why I grabbed those calls. They’re cheap, they offer upside, and most importantly, they give me peace of mind. And wouldn’t you know, TLT is up over 1% today and my calls are up a nice chunk.
Why I’m Staying Cautious
It’s not about calling a top. I’ve done that before and watched stocks rally 50% against me. This is just about having a little insurance when I don’t trust the action and everything feels stretched.
It’s been a weird week. The market’s opening and closing at nearly the same levels. Volatility isn’t giving us much. You’ve got junk stocks ripping, big names like Cisco (CSCO) and SuperMicro (SMCI) popping on earnings, and random headlines moving everything else.
There’s not a lot of clarity. That’s why I’m sticking to small, cheap setups and keeping hedges on. Until I see something that really stands out — either on the long or short side — I’m going to keep playing defense.
That starts with protection in TLT and ends with me waiting for better risk-reward.
Order Flow:
Seeing some very odd, VERY long-dated calls in Bank of America (BAC), as well as a short-dated one. Didn’t see any juicy earnings plays, but we did get some sizable short bets in both D-Wave Quantum (QBTS) and Rivian (RIVN).
This is for informational and educational purposes only. These are not official alerts issued by Lance, but rather some interesting orders picked by the team at Lance Ippolito Trading.
When you look at these plays, always take the market maker move into consideration.
You can be right on the direction but still lose money if the stock doesn’t move enough. That’s where the market maker move comes in clutch.
With puts, they’re often downside hedges in case a stock tanks, especially around earnings. The further out of the money they are, the more likely they are to be hedges.
Also be sure and check when the company’s earnings date is because many of the plays we post here are centered around earnings!
And finally, always remember the golden rule when it comes to buying calls: Buy dips, sell rips — and don’t chase!
If a stock’s moved a ton already today, maybe wait for a pullback.
There is inherent risk in trading. Trade at your own risk.
Note: If no date is listed after the month, it’s the monthly expiration (third Friday).
The team at Lance Ippolito Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. This Setup Handed Lance a 96% Win Rate in a Terrible Market
About $11 trillion has been lost over the last 10 weeks…
Yet I was able to nail a96% win rate on a daily setup for 4PM Payouts.
Let me show you how it’s done!
