A relatively calm market with high volatility is a recipe for success for options traders as the premiums are high and the fluctuations are not extreme.
What's my trade for today?
#MGM ( #MGMResorts ). Earnings just came out and it beat expectations, however the overall market conditions didn't allow the price to jump. The IVR is still very high so it's a perfect setup for a strangle.
Because I am more bearish than bullish at the moment I decided to go down all the way to $30 with the put side and 2x the expected move on the call side.
The stats
Trade Type: Short Strangle
Strike: $30 / 48
Expiry: 17 Jun
Delta: -11.3
IV Rank: 61.5
Premium: $0.82
Cap Req: $409
Annualised Prof at Expiry: 163%
Other adjustments:
https://www.tycoonitos.com/community/market-comments/market-comments-20220330
https://www.tycoonitos.com/community/market-comments/market-comments-20220422
https://www.tycoonitos.com/community/market-comments/market-comments-20220414
Let me know your thoughts.
This worked out nicely!
Closed at $0.92 for an annualised profit of 261%.
Rolled down the call side to $42.
Total credit: $1.25