What is the short term fate of Russian markets? Economic sanctions have sent the country into dire economic straights but it seems that the worst is not over yet. The falling price of oil also puts pressure on the Russian economy and that pressure is reflected in the weakness of the Ruble and a collapse in Russian related equities. One way a trader can take advantage of further potential downside in Russian markets is with the Market Vectors Russia ETF (RSX).

The Market Vectors Russia ETF (RSX) is a fund that tries to emulate the yields and price performance of the Market Vectors Russia Index. The fund is highly linked to the Russian Index and invests 80% of its assets in securities that comprise the index, which is made entirely of Russian companies. Currently, RSX is up about 4% on the day and trading at $16.96. A full $4 off its 52-week low of $12.50, which was hit on December 1st of last year, while it’s still a ways a way from its 52-week high of $27.46 from July of 2014. The fund has total net assets of $1.88 billion and a year to date return of 21.80%. Despite this recent strength in the RSX weakness in oil and the possibility of more sanctions could provide traders an opportunity to short this bounce. RSX is still lower by over 28% over the past 6 months.

Potential Trade Setup: With the options market implying a move of around $2.70 by June expiration a trader can look for an options trade with a downside target around $15.30.

Trade: Buying the RSX Jun 16-15 Put Spreads for $0.30
Risk: $30 per 1 lot
Reward: $70 per 1 lot
Breakeven: $15.70

This trade offers better than 2-1 on a traders money and gives a trader great short side exposure with a clearly defined level of risk.

Nike, Inc. (NKE) is one of the most recognizable brands on the planet. From Michael Jordan’s famed “Air Jordans” to the University of Oregon’s football jerseys (Nike founder Phil Knight is an alumnus), Nike is one of a few companies at the pinnacle of the athletic apparel sector of the economy. The company, which was founded in 1964 and is headquartered in Oregon, employs over 55,000 people and has a market cap of nearly $85 billion. Since hitting a 52-week low of $70.60 last April, NKE was unstoppable as it pushed itself to a 52-week high of $99.76 in early December. Since that time, NKE has held strong and is currently trading at $97.90, just $2 off that 52-week high. The company is expected to report Q3 earnings after the close today and according to TD Ameritrade Chief Stategist JJ Kinahan, there has been a lot of put selling at the March 95 strike price, indicating that investors are bullish on the stock ahead of earnings (Yahoo Finance). The stock has rallied on 5 of the last 8 earnings reports with an average move of about 5%. The chart is decidedly bullish and if it’s bullish earnings history holds true again, we could be looking at a new 52-week high in the athletic apparel giant.

My Trade: I am buying the NKE Mar 101-103 Call Spreads for $0.45
Risk: $45 1 lot
Reward: $155 per 1 lot
Breakeven: $101.45

PowerShares DB US Dollar Bullish ETF (UUP) is a fund that follows the price and yield performance of the Deutsche Bank Long US Dollar Futures Index. The index is made strictly of long futures contracts, which attempt to replicate being long the US Dollar against six of the world’s major currencies; the Euro, British Pound, Canadian Dollar, Swedish Krona, Japanese Yen, and Swiss Franc. The fund opened at $26.30 this morning and has seen a slight price decline throughout the A.M. period of $.06 (.25%). UUP has traded in a relatively tight range over the past 52 weeks, staying between $21.14 and $26.50 with the ETF in a decidedly bullish trend since July of last year and hitting the 52- week high this past week.

Despite the extremely bullish price action in the US dollar there are traders who are putting on very large bearish bets in UUP ahead of the Fed meeting and announcement today. This trader may believe that the Fed announcement will send the dollar lower or they may just believe it is overbought. Yesterday a trader bought 250,000 UUP Jun 25 puts for $0.12 as a single block order. This is a $3 million bet on downside in the UUP through Jun expiration. The timing of this bet is important to note as markets are expecting the Fed to signal today when a raise in rates may be coming. Whether this is a speculative bet or a hedge this order is worth note. UUP is trading slightly lower this morning but at the money implied volatility in the name is touching new 52 week highs. This signals that traders may be expecting some wild moves in the UUP post Fed announcement.

Trade: A trader bought 250,000 UUP Jun 25 puts for $0.12
Risk: $12 per 1 lot
Breakeven: $24.88

Adobe Systems Incorporated (ADBE) is a software company that offers a range of products used by professionals in a number of industries. The company’s stock is currently trading around $79.20 in a 52 week range of $57.15-$80.30. The stock has been very strong this year with shares rallying 9% year to date. ADBE is expected to report their most recent quarterly earnings after the close today.

The stock has been strong on earnings day over the past 8 quarters. ADBE shares have rallied 6 of the past 8 quarters with an average move of 6.9%. Currently the options market is implying a move of around $4.15 by Friday’s close. This would imply an upside or downside move of around 5.2% by March expiration. ADBE is looking very strong on a chart as well with shares trading well above the Ichimoku cloud and value area for the month. With a strong historical bullish bias and a strong technical setup I will be looking to get long ADBE into earnings.

Potential Trade: Buying the ADBE Mar 82.5-85 Call Spreads for $0.50
Risk: $50 per 1 lot
Reward: $200 per 1 lot
Breakeven: $83.00

Since the historical movement is higher than the move implied this time I am willing to get a little more aggressive with my upside target.

The first two weeks of March have given us a rather nasty bout of whiplash. We check futures before bed and theyʼre down. We wake up at 5 and theyʼre up. By the open…

We find some comfort in an extra shot of espresso, but the lack of trend is taking its toll on our sleep. The Dow Jones Industrial Average (DJIA) has closed up or down by triple digits on seven of the last ten trading days. Notably, four of these moves exceeded 250 points.

Despite the gyrations, the CBOE Volatility Index (VIX) is still only 16.6, well below both Januaryʼs rise to 22 and last Octoberʼs spike above 26. In other words, the Chicago based traders who make markets in the S&P 500 Index options, which in turn determine the level of implied volatility, are far less stressed than we are! The trading community is effectively telegraphing a view that the broad market will continue to yo-yo up and down rather than break out in one decisive direction. We may have whiplash, but they clearly do not.

Traders not only embrace volatility, they live for it. Volatility, or “vol” is their lifeblood. It provides opportunities to get in and out, presumably at a profit. We generally take a longer-term view, but we can still borrow a page from their playbook: Trade the range.

We are combing our portfolio for stocks which, like the broader market, are gyrating more than usual. We are looking to make opportunistic options trades, buying calls on down days and puts on up days (if the VIX were higher, we would sell puts on down days and sell calls on up days). Because we are buying options, we generally focus on slightly in-the-money strikes, thereby minimizing both time decay on our P&L and premium paid to the Chicago crowd.

Hereʼs what weʼre eyeing today as the DJIA falls 260 points. Happy trading.

1. BankAmerica April 15 calls at $1.12 stock at $16.00
2. Google April 535 calls at $22.00 stock at $545.00
3. News Corp 16 calls at $0.75 stock at $16.50

Urban Outfitters, Inc. (URBN) is a retailer that offers a variety of apparel and lifestyle products from number of different brands. The company operates over 500 stores in the U.S., Europe, and Canada. The company’s stock is currently trading around $39.07 in a 52 week range of $27.89-$40.67. The stock has been very strong this year with shares rallying over 11% year to date. The stock is also trading very well on a chart with shares trading well above the Ichimoku Cloud but inside of value for the month.

URBN is reporting earnings today after the market close. The stock has a relatively mixed performance record on earnings day. In the past 8 quarters the stock sold off 4 times and rallied 4 times with an average move of 4.6%. With stock at current levels the options market is implying a move of around $2.70 by March expiration. This implies that the stock could rally as high as $41.65 by option expiry. Even though the historical movement is mixed there has been some bullish options activity in URBN ahead of this release. We have seen several large blocks of calls bought in URBN. With the bullish orderflow and relatively bullish chart setup I will be looking for a long position in URBN into earnings.

Potential Trade: Buying the URBN Mar 41-12 Call Spreads for $0.25
Risk: $25 per 1 lot
Reward: Unlimited
Breakeven: $41.25

Finisar Corp. (FNSR) is a California based telecom and network communications device and service provider that operates both domestically and with a significant international presence. At the time of this post (12:10PM CST), FNSR is currently trading at 22.11 up 8.76% on the day. The stock is higher on positive forward guidance that exceeded expectations as a part of yesterday’s Q3 earnings call. With today’s sharp break higher through 22.00 resistance on the daily chart, the stock is currently trading within the upper-middle portion of its 52 week trading range of 14.22-28.85.

Stock is ripping higher today on earnings and it appears that traders believe this trend will continue through April expiration. Earlier today a trader bought 6,668 FNSR Apr 23 Calls for $0.70. This was labeled an opening position and would express a very bullish sentiment in FNSR. With activity this strong and a great earnings release I will be looking for more upside in FNSR.

Trade: A trader bought 6,668 FNSR Apr 23 Calls for $0.70.
Risk: $70 per 1 lot
Reward: Unlimited
Breakeven: $23.70

Yahoo! Inc. (YHOO) is a California based information technology and advertising service provider most well known for its eponymous search engine services. At the time of this post, YHOO is currently trading at 44.17, up 3.71% on the day after earlier rumors of a potential buyout from Alibaba Group hit the street. After today’s move higher, YHOO still remains in the upper-middle portion of its 52 week trading range of 32.15-52.62 as it looks to continue the push higher to re-test 45.00 level resistance on a daily chart.

Earlier today a trader bought 3,569 YHOO Mar 6th Weekly 43.5 Calls for $0.25. The stock was trading around $42.95 at the time of the trade and these calls ripped higher with the stock. These calls have already traded as high as $1.04 today making this trade an absolute blowout winner. These calls expire at the end of the week and are a great example of how even in large cap names order flow in weekly options can be traded for great profits.

Trade: A trader bought 3,569 YHOO Mar 6th Weekly 43.5 Calls for $0.25
Risk: $25 per 1 lot
Reward: Unlimited
Breakeven: $43.75

If a trader would have bought a 20 lot of these calls they would have profited $1,580 at the highs.

The Coca-Cola Company (KO) is an Atlanta based beverage and soft-drink manufacturer and distributor, and currently represents one of the world’s most recognizable brands. At the time of this post (1:30PM CST), KO is currently trading at 43.39, up 2.19% on the day. The stock is currently well within the upper portion of its 52 week trading range of 37.85-45.00, and today’s move higher represents a significant continuation move after yesterday’s bounce off of 42.00 level support on a daily chart.

KO has seen a huge move higher today as we continue to see bullish unusual options activity in the name. Our traders have been following the activity in this name since last week when massive blocks of the KO May 44 calls were bought. Our traders bought these calls and have since seen them double in value. Since then there have been more blocks of calls bought on multiple lines of calls. It seems like institutional traders are speculating on news in KO over the weekend. The stock has also broken above the Ichimoku Cloud and is now trading in bullish territory on a chart. With the improving technical story and the massive order flow in the name we are expecting a lot of upside in KO through the May expiration.