Thoughts on COMP OTM Puts and Current Vol
I'm looking at $COMP here, specifically the potential for OTM puts given the recent dip to 11.075 today. The move from ~11.75 down to that level, coupled with the overall market softness, makes me think there might be an opportunity for a quick volatility play if we see some further downside. Implied volatility for the nearer-term expirations has definitely perked up, which is interesting for selling credit spreads or potentially buying a cheap flyer further out if I'm betting on a continued leg lower. The risk, of course, is a bounce back above the previous support around 11.50, which would probably crush those premiums. I'd be watching 11.00 very closely for any hold or break. If it breaks decisively, then my thesis gains traction; if it holds and we rebound, then this setup gets invalidated pretty quickly.
The implied volatility might have perked up, but that also means the premium for those OTM puts is likely already inflated. Seems like chasing a move that's already largely priced in, unless you have a strong thesis beyond general market softness.