Market comments 20220511

Where is the sanity in the market nowadays? A key inflation data came out and the inflation is higher than what the market was expecting. So what does the market do at open? It goes up. How does that make sense?

In the end, as expected we have seen another 1.4% drop today and it won't be the last time we see prices going further down in the short term.

So what's my trade for today?

With the VIX so high, there is no need to trade individual stocks. I still trade them for the sake of my commitment to educate the public and for my learning, but it was finally time for me to sell a wide #SPY strangle.

I selected the May expiry because my NFLX position is a guaranteed looser so I was hoping to balance it out next week, when the May options expire.

What do I mean by that?

Traders have to be comfortable losing as no-one can win every single trade. It is just not possible. But it makes us feel better when we lose say $2 on one trade (that's 2x$100) and win $1.90 on another. It's purely a psychological impact.