The market continues its rally despite my assumption last week that we will see a drop this week. Unless the market turns around in the coming 2 days, it won't happen. I must say, it's testing my portfolio, even though I am playing both sides with strangles.
Large moves in one direction over a short period of time is always challenging for options traders. That's just the nature of the business. The only thing I could do was to roll up the put side on a few of my positions.
So what's my trade for today?
I could not resist taking a shot at the #BABA (#AliBaba) earnings tomorrow before market open.
The expected move is $10 and I went double that on both sides (put, call).
The risk with earnings trades is fairly high and I would normally avoid earnings, however if this doesn't work out (meaning that there will be a significant move to one direction) then I have a strategy that I wanted to test.
The stats
Trade Type: Short Strangle
Strike: $75 / 120
Expiry: 19 Aug
Delta: -3
IV Rank: 33
Premium: $0.84
Cap Req: $1915
Annualised Prof at Expiry: 100%
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.
Closed:
None
Rolled:
https://www.tycoonitos.com/community/market-comments/market-comments-20220729
https://www.tycoonitos.com/community/market-comments/market-comments-20220421
https://www.tycoonitos.com/community/market-comments/market-comments-20220520
https://www.tycoonitos.com/community/market-comments/market-comments-20220524
https://www.tycoonitos.com/community/market-comments/market-comments-20220630
Let me know your thoughts.
Perfect trade!
Closed at $0.53 for an annualised profit of 591%.