What a nice roller coaster ride the market is going through... Over 8% rally in 6 trading days. We are only 6.8% off the all-time high so it's hard to imagine that this rally will last much longer, which means selling naked put options is probably more risky than selling naked calls. The challenge is that typically when a stock goes up then the volatility drops, therefore the premiums that we collect are lower.
What's my today's pick?
Given the broad market movement over the past 6 days, plus the fact that the next earnings season is coming up, I picked #CCL ( #CarnivalCruise ), which had it's earnings this morning. Considering that it barely moved, I don't expect much movement in the coming days/weeks. The market guessed its performance very well.
Carnival Cruise Lines Daily Chart
The volatility is still a bit higher than usual so there are a few coins left on the table. Although, I don't expect this trade to be a fast one. It's more of a safe move as I have a feeling that another downwards move is on the way for the overall market. I selected April as the premium offered for May was not attractive enough.