What will the market do in 2023 is a question that nobody would be able to answer. Perhaps the market crash, that many have been predicting to take place in 2022, will finally eventuate but we have already seen significant collapses. The S&P500 is down about 20% so if the trend continues then we will see the market down 40% by the end of this year.
Do I really see that happening?
Frankly speaking, no. The higher interest rates are already biting a lot of people and to avoid a total melt-down, the central banks and governments around the world will potentially start dropping their interest rates and restart with their quantitative easing. Both of these will put upwards pressures on the stock markets. To top it up, hopefully we will see the Russian leaders ending their invasion in Ukraine, which should also have a calming effect on the market participants.
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?
#EWZ (#BrazilETF) tanked today so I believe it was a perfect opportunity to sell some aggressive puts against it at $25 strike.
Trade Type: Short Put
Expiry: 17 Feb
IV Rank: 42
Cap Req: $420
Annualised Prof at Expiration: 193%
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 detail here:
Let me know what you think.
Closed at $0.62 for an annualised profit of 1651%.
I could have held this for longer but taking nearly 40% out of a trade in 2 days is always a good idea. We might see the price moving lower again in the coming days and this trade can be reinstated.