The #VIX jumped a fair bit today to levels that are non-sustainable. On the monthly chart below we can see that the volatility (or fear) index only closed above 35 about 4-5 times over the past 20 years, which included the #dotcombubble, #gfc, #covid. If it keeps going up then the war in #Ukraine will elevate the market fear to the same level as some of the other major financial meltdowns.
In this type of market I prefer to just sit on the side-lines as it's better to make no money than to lose money. However, as through my market comments I am committed to highlight one trade a day, I am choosing #F ( #Ford ). The company is trading at 4x earnings and the tangible book value is at 1.5. It was recently trading as high as $25 so the $15 stock price is quite attractive.
The stats
Trade Type: Short Put
Strike: $15
Expiry: 14 Apr
Delta: 34
IV Rank: 49.6
Premium: $0.59
Cap Req: $193
Annualised Prof: 108%
This one worked out nicely. It can be closed at $0.32 only 1 day into the trade. The annualised profit is 5106%.
The beauty of these trades is that they are cheap so you can sell heaps of options without chewing up too much capital.