It was good to see a bit of volatility contraction today but I personally could do with some more.
The Fed announcement will come out tomorrow and it is highly likely that the market will move.
The big question is: which way?
I am hoping that we will see the market calming down at least temporarily so that I can close some of my positions, but it's worth keeping in mind that, according to some studies, the market tends to revert back to pre Fed announcement levels within 48 hours. So if the market calms down (normally an upwards move), it's probably best to reduce exposure.
So what's my trade for today?
After seeing the price dropping a fair bit following a major spike in recent months, #GOLD (#BarrickGold) seems like an attractive paper to trade. The volatility is high so the risk/reward is pretty good for a wide strangle.
Note: GOLD is not the precious metal. It's a mining company that digs out the precious metal.