Daily Trades 20230124

Despite all the bad news out there the market doesn't show any signs of collapsing.

I believe that we are in a risky territory at the moment so I continue playing it extra safe.

I rolled a few of my positions from Feb to March but kept my put strikes much further away from the current prices because I don't want to be caught in a tough situation should the prices drop. Also, with the volatility being so low, instead of going for additional credits I chose to widen my strikes.

Reminder: when the volatility expands then option prices go up and even without any underlying price movement we can quickly find ourselves way too close to the price based on the delta, which indicates the probability of profit.

For those, who are new to my daily market comments, I place and document one of my options trades each day with the objective of helping everyone learn how to trade options.

What's my trade for today?

Although I already have a position in #INTC (#Intel), I wanted to test a calendar spread for the upcoming earnings. I sold the Jan 27 $30 put and bought the April $30 put. The idea behind this trade is that if the price after earnings remains above $30 then my short position will expire worthless but my long position, as it's still a fair bit away, will retain a good portion of its value.

The stats

Trade Type: Calendar Spread

Strike: $30

Expiry: 27 Jan

Delta: 2

IV Rank: 51

Premium: $-0.89

Cap Req: $89

Annualised Prof at Expiration: ?

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-20220219

https://www.tycoonitos.com/community/market-comments/market-comments-20220524

https://www.tycoonitos.com/community/market-comments/market-comments-20220520

Watch this video for more detail.

https://youtu.be/wOL89AatTqs

Let me know what youthink.