It's always funny games with the market. Did they finally realise that the interest rate hikes are for real?
We have had several consecutive months with rate hikes and the market was still going up. It makes no sense to me.
Fortunately today we had a correction. The next earnings cycle will be very interesting. A lot of companies announced layoffs in recent months so I think we are going to see another volatile period.
What does it mean for options traders?
We must make sure that we maintain a decent enough capital. When volatility goes up, option values go up too and it can hurt options sellers.
For those, who are new to my daily market comments, I place and document one trade a day with the objective of helping everyone learn how to trade options.
What's my trade for today?
#AAL (#AmericanAirlines). I trade options on this stock regularly and I find them especially attractive every time the price goes below $14. Today the price went below $13 so this is a no-brainer territory for put options.
The stats
Trade Type: Short Put
Strike: $13
Expiry: 20 Jan
Delta: 48
IV Rank: 8.6
Premium: $0.8
Cap Req: $259
Annualised Prof at Expiry: 313%
IMPORTANT: Studying previous trades provide the opportunity to everyone to learn a great deal so I encourage you to click on the links below and digest the info.
Closed:
None.
Rolled:
https://www.tycoonitos.com/community/market-comments/market-comments-20220524
https://www.tycoonitos.com/community/market-comments/market-comments-20220520
https://www.tycoonitos.com/community/market-comments/market-comments-20220421
Learn more:
Let me know what you think.
Nice winner!
Closed at $0.35 for an annualised profit of 317%.