I was certainly not surprised to see the market dropping today but the biggest news from my perspective was the massive drop in Google.
The drop took place after their AI event in which investors expected something more.
Perhaps they are thinking that AI will cannibalise some of the advertisement money Google has been enjoying for a long time.
Anyways, I believe the market overreacted so I took a heavily bullish stance in Google by selling the Feb $107 call and purchasing the Jun $100 call. The deal cost me $8 but if we see a bounce back then this deal will be highly profitable. The below analysis shows the potential return on Feb 17.
The stats
Trade Type: Diagonal Spread short Feb $107c; long Jun $100c
Strike: $107
Expiry: 17 Feb
Delta: 39
IV Rank: 43.4
Premium: -$8
Cap Req: $800
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/daily-trades-20230117
Watch more detail here:
Let me know what you think.
This trade did not work out as intended but it's far from being lost.
Rolled my short position to March and down to $100 for $2.18 credit.
Current position: short Mar $100c; long Jun $100c
Total premium: -$5.82