The tape action I expected to see yesterday arrived a day late. The market fell a bit but I didn't feel that it was about to crash. Especially given the fact that the VIX also fell so we might see another upwards move tomorrow.
But who knows? Everybody is just guessing when it comes to market predictions, which is why in seasons like now, it's best to play both sides of the equation with option strangles.
So what's my trade for today?
I felt that it was time to take some risk with an oil stock, #OXY (#OccidentalPetroleum). This stock went from $9 to $70+ in the past 2 years. That's an insane move so we have to be careful with it. Obviously the war in Ukraine is the key driver for this growth so if the war stops then we can expect the price to fall. But if the war escalates further (e.g. spread to other countries) then the price of oil will continue going up causing oil related stock to go with it.
Trade Type: Short Strangle
Strike: $55 / 85
Expiry: 15 Jul
IV Rank: 25.2
Cap Req: $704
Annualised Prof at Expiry: 262%
IMPORTANT: we can all learn loads by keeping an eye on older trades. Today I closed two trades.