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.