Today both the VIX and the SPY fell a bit, which gives me the impression that we can expect the prices to go higher tomorrow. However crude oil has also moved up and normally creates downwards pressure on the market. What has calmed down the markets though is the fact that they know where the Fed stands at the moment with managing inflationary risks.
As mentioned last week, even though the prices are currently on an upwards move, I would be very cautious with going long. At the end of the day, we still have a major geo-political issue in Europe that can turn even more devastating from one moment to the next.
In my opinion, it's best to stick to solid businesses that actually produce profit.
So what would I trade today?
#GM ( #GeneralMotors )
The stock has been beaten up quite heavily over the past few weeks and the current level seems very attractive. When we sell a naked put option we should always ask ourselves: would I be happy to buy this stock at my strike (in our case $40)?
Although the IVR came down a fair bit over the past few days but that's reflective of the overall market conditions.
Trade Type: Short Put
Expiry: 14 Apr
IV Rank: 49.3
Cap Req: $515
Annualised Prof at Expiry: 204%
Let me know your thoughts.