With the market falling a fair bit over the past two weeks I am seeing more and more directional opportunities, however the volatility across the board is fairly low. This represents a bit of risk as even if we are right directionally an increase in volatility can set options traders back.
Having said that, there are multiple stocks at really attractive levels and it is just the matter of choosing the ones we are comfortable with.
In relation to my documented trades, I had another fairly successful week with 5 closed trades of which 3 of them produced great returns.
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?
#SQ (#Block). The stock followed the wider market movement so I thought it's time to catch the falling knife with a $52.50 put expiring in Jan. The premium is far better than in the case of many of the other stocks.
Trade Type: Short Put
Expiry: 20 Jan
IV Rank: 26.4
Cap Req: $526
Annualised Prof at Expiry: 330%
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 more about this here:
Let me know what you think.
Closed at $0.93 for an annualised profit of 397%.