The market was finally enjoying a bit of relief from the recent selloff and then the last trading hour arrived...
The news broke out that the US is banning Russian oil and gas purchases.
Now we can all anxiously wait to see if the other western allies will follow suit.
The Russian oil import only takes up about 8% of US's import but the situation in Europe is very different. The Russian oil takes up over 30% so I don't see them rushing with a decision to follow the US but if I am wrong then we could potentially brace for GFC 2.0.
Why do I think that?
It's because, unfortunately, the global economy is strongly affected by the oil prices. Think of a farmer, who needs petrol in his trucks. Think of the travel or transport industries. Think of every day individuals driving to and from work.
The bottom line is: the more money we spend on petrol the less money we have for other stuff, like investments.
Think about this: If you have to change your mind about building an investment house then you are taking away very many hours of work and production from the global economy. The impact is much larger than what most people comprehend.
But let's hope that Russia's leaders come to their senses (or be replaced) and the world economy can get back on track to a less volatile situation.
What's my today's pick?
#K ( #Kellogs )
Surely I don't need to introduce this company. Just go into your kitchen and you will most likely find their products in your pantry. The stock dropped today from $66 to $62.63 so it's a good time to sell a naked put. I don't even try to get an understanding of the reason as selling an April $57.5 put is pretty robust. Over the past 10 years it really only been under this level a couple of times.
If it wasn't for the risky global economical conditions then I would have selected the $60 strike but in today's market it's better to make less but lower our risks significantly.
Trade Type: Short Put
Expiry: 14 Apr
IV Rank: 87.5
Cap Req: $747.1
Annualised Prof: 102%
What a winner!
Less than 24 hours into the trade and we can already close it (buy back the put option) at $0.55, which equates to 1,075% annualised profit.
I wish it was always this easy :)