The weird behaviour of the market continues: the Fed reiterates that the inflation is slowly going down but they will continue raising interest rates and the market rallies.
It makes no sense.
The interest rates are going up based on historical data so there is a lag effect that I believe is not being taken into consideration.
Anyways, from the options traders' perspective it doesn't matter much as our main focus is the volatility movement. In anticipation of a spike in volatility I am being very cautious by doing a lot of calendar spreads, which allows me to take advantage of the low volatility, enjoy very low risk and have large upside potential.
Today I had to make a few adjustments by rolling up my put sides on my 'forever' positions but I was also able to close my X position for a nice profit.
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?
#INTC (#Intel) put calendar spread. I sold the Feb $30 put option and purchased the April $30 put. The trade cost me $1.48 but it has a tremendous upside potential. My best case scenario is if it closes at $30 on 17/Feb as it could give me a nearly $90 profit.
The stats
Trade Type: Put Calendar Feb $30p / Apr $30p
Strike: $30
Expiry: 17 Feb
Delta: 18
IV Rank: 17.2
Premium: $-1.48
Cap Req: $148
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:
https://www.tycoonitos.com/community/market-comments/daily-trades-20230105
Rolled:
https://www.tycoonitos.com/community/market-comments/daily-trades-20230123
https://www.tycoonitos.com/community/market-comments/market-comments-20220520
https://www.tycoonitos.com/community/market-comments/market-comments-20220421
Watch more here:
Let me know what you think.