Options Insight: Why the Johnson & Johnson Risk Reversal?

The video discusses the current market conditions, focusing on a 'risk off' day with the Dow down. It explores options market strategies, highlighting the importance of hedging and potential trades. The speaker analyzes market sentiment, noting muted volatility despite historical trends. The discussion shifts to investment strategies, particularly in Johnson & Johnson, emphasizing its strong earnings and pharmaceutical growth. The video concludes with a recommendation for a specific options trade to capitalize on market conditions.

What is a potential strategy in the options market on a 'risk off' day?

• Selling all options positions

• Buying high volatility stocks

• Hedging or booking a lower strike to buy an upper strike call

• Investing in fixed income securities

Which months are typically the most volatile, according to the transcript?

• October and November

• August and September

• June and July

• December and January

What is a key growth driver for Johnson and Johnson's stock?

• Consumer products

• Medical devices

• Pharmaceutical side of the business

• International expansion

What type of options trade is suggested for Johnson and Johnson?

• Selling both a put and a call

• Buying both a put and a call

• Selling a put and buying a call

• Buying a put and selling a call

How many times has Johnson and Johnson beaten EPS expectations in the last eight quarters?

• 6 times

• 8 times

• 7 times

• 5 times