Surprise, surprise! The inflation is here and the Fed has to raise the interest rates....
Everybody knows this but when the Fed sends this message the market seems to go into panic mode.
But the big question is: who is doing the sell off?
When I look at the trade volumes it gives me the impression that it's the retail traders that go into panic mode and feed the big fund managers.
It will be interesting to see if we will experience a bounce back tomorrow.
So what's my trade for today?
I would not be brave enough to trade an individual stock so I selected #QQQ ( #NasdaqETF ). I selected a fairly wide strangle with both legs around the 15 delta, which means that on both sides the probability of profit is about 85%.
The stats
Trade Type: Short Strangle
Strike: $300 / 370
Expiry: 20 May
Delta: 7.9
IV Rank: 68.6
Premium: $3.25
Cap Req: $3213
Annualised Prof at Expiry: 127%
I also made an adjustment here:
https://www.tycoonitos.com/community/market-comments/market-comments-20220420
Let me know your thoughts.
This trade took place yesterday (15/Feb):
Rolled up my put side to $285 for $0.50 credit.
Current position: short Mar $285p/308c
Total credit: $19.68.
Rolled up my put side to $280 for $0.87 credit.
Current position: short Mar $280p/308c
Total credit: $19.18
Rolled up my put side to $270 for $0.40 credit.
Current position: Mar $270p/$308c
Total credit: $18.31.
Rolled to March $265p/308c for $0.27 credit.
Total credit: $17.91.
Rolled up the put side to $265 for $0.38 credit.
Current position: $265p/297c
Total credit: $17.64
Rolled up the put side to $260 for $0.45 credit.
Current position: $260p/297c
Total credit: $17.26
Rolled down the call side to $297 for $0.44 credit.
Current position: $255p/297c
Total credit: $16.81
Rolled up the put side to $255 for $0.36 credit.
Current position: Feb $255p/300c
Total credit: $16.37.
Rolled up the put side to $250 for $0.51 credit.
Current position: Feb $250p/300c
Total credit: $16.01.
Rolled to Feb $245p/$300c for $3.68 debit.
Total credit: $15.50.
Here is the graphical representation of my performance on QQQ:
On this post you can read a bit more about this particular trade.
Rolled down the call side to $274 for $0.56 credit.
Current position: Jan $265p/274c.
Total credit: $19.18.
I was hoping that I could roll to Feb today but I am still optimistic that the price will go up above my put strike ($265) before I roll.
Rolled down the call side to $277 for $0.65 credit.
Current position: Jan $265p/277c.
Total credit: $18.62.
Rolled down the call side to $280 for $0.50 credit.
Current position: Jan $265p/280c.
Total credit: $17.97.
Rolled down the call side to $285 for $0.46 credit.
Total credit: $17.47.
Rolled down the call side to $290 for $0.50 credit.
Total credit: $17.01
Rolled down the call side to $298 for $0.96 credit.
Total credit: $16.51.
Rolled up the put side to $265 for $0.63 credit.
Total credit: $15.55.
Rolled down the call side to $306 for $0.85 credit.
Total credit: $14.92.
Rolled up the put side to $260 for $0.54 credit.
Total credit: $14.07.
Rolled to Jan $255p/312c for $1.61 credit.
Total credit: $13.53.