3 Option Trade Ideas for Friday

The market is trending higher, with the S&P 500 above key moving averages, strong momentum, and low volatility. Improved market breadth shows more stocks hitting new highs than lows, indicating bullish setups. As July's monthly expiration nears and earnings reports approach, traders could use delta-positive strategies like vertical or credit spreads to leverage market strength. However, with a lower VIX, yields on premium selling might diminished returns, so adjust trade selection and structure accordingly.

Semiconductors remain a leadership group, and SMH is consolidating in a tight range near highs, suggesting potential for a breakout. While implied volatility (IV) is currently low (below the preferred 50% threshold), the directional bias favors the bullish delta exposure. A well-placed bull put spread offers a favorable risk-reward if the price continues to grind higher.

SMH Bull Put Spread