According to a study by a very reliable team, after each Fed announcement the market returns to its pre-announcement levels with a very high probability (I can't remember the percentage).
Today, the Fed announced a 0.75% rate hike and the market rallied big time.
Normally interest rate rises would push the stock prices down so it was an interesting reaction but obviously everyone wants inflation to be tamed so that's why it was considered as a positive move.
Nevertheless, let's see if the market will drop as the study suggested.
So what's my trade for today?
#BA (#Boeing). Earnings is behind us so it's relatively safe to trade it. The IVR dropped, as usual, after the earnings but the ROI potential is still great. I selected Aug as I am hoping that I will be able to just get out of this trade soon.
Trade Type: Short Strangle
Strike: $145 / 175
Expiry: 19 Aug
IV Rank: 35.7
Cap Req: $1931
Annualised Prof at Expiry: 293%
IMPORTANT: Studying previous trades provide the opportunity to everyone to learn a great deal so I encourage you to click on the links below and digest the info.
Let me know your thoughts.
Closed at $3.22 for an annualised profit of 643%.
Probably could have held it for longer but grabbing this much profit within 24 hours is worth it any day.