Massive 16% rally in the market over the past 2 weeks and the SPY is only $4 off a seemingly solid resistance line. Will the market fall next week? I am quite certain that it will, but it's always just a guessing game.
It is quite fascinating though that the market seems to have a gravitational pull upwards.
So what's my trade for today?
#ROKU. It has seen much better days in previous years going for nearly $500. If someone told you last year that it will be trading at $65 in mid-2022, they would have ridiculed you. I don't know much about ROKU but one thing is certain: the option premiums are very high even after the earnings. For this reason I selected a fairly wide strangle.
Trade Type: Short Strangle
Strike: $45 / 95
Expiry: 16 Sep
IV Rank: 31.7
Cap Req: $656
Annualised Prof at Expiry: 151%
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 what you think.
Closed at $2.46 for an annualised profit of 170%.
I probably could have held it longer but wanted to de-risk my portfolio a bit.
Rolled down the call side to $75 for $0.30 credit.
Total credit: $4.88
Rolled down the call side to $80 for $1.12 credit.
Total credit: $4.58
Rolled up the put side to $65 for $0.79 credit.
Total credit: $3.46
Rolled up the put side to $60 for $1.34 credit.
Total credit: $2.67.