The market hit lows not seen since 09/11/2022 today causing a fair bit of stress for a lot of traders but then some forces started to buy the dip and the overall fall of the day wasn't alarming at all.
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?
#HOOD (#Robinhood) long call. Due to the turmoil around the FTX collapse the Robinhood selloff continued today and the stock reached really attractive levels. With a call option expiring in 2 years I am betting on some sort of rebound. I chose the $5 strike as it's so deep in the money that the option price moves nearly identical to the stock price. So if the price goes up to $9 then I will make about $100 per trade. On the flip side, the risk is fairly minimal given the long expiration.
Trade Type: Long Call
Expiry: 17 Jan
IV Rank: 7.1
Cap Req: $450
Annualised Prof at Expiry: ?
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.
Watch the video here:
Let me know what you think.
Closed at $5.60 for an annualised profit of 343%.