A big payday at the market today for many of the premium sellers (options traders).
I was also able to close many of my trades and rake in nice profits.
Fortunately the market did not go loose and pretty much stopped nearly at the same level it opened the year.
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?
#MU (#MicronTechnology) strangle expiring in Feb. Frankly speaking there is nothing exciting about this trade: the call side is around 1 standard deviation while the put side is higher than 1 standard deviation. The reason why I decided to go with the $45 put instead of the $47.50 is because the price jumped $3.83 today so if we see a bit of bounce back down then my position should be more delta neutral. The IVR is not really good so I don't expect this trade to be a quick one.
Trade Type: Short Strangle
Strike: $45 / 62.5
Expiry: 17 Feb
IV Rank: 21.2
Cap Req: $543
Annualised Prof at Expiration: 199%
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 $1.15 for an annualised profit of 344%.
Rolled up my put side to $50 for $0.60 credit.
Current position: $50p/62.50c
Total credit: $1.90.