Market comments 20220805

Since last week I was hoping for a drop in the market and I did get a bit today but the move was way too small to my liking.

Oh, well. Our wishes won't change the market :)

Here is my SPY position in relation to the price movement. I must say, I had a nice run so far but if the market breaks out then I will most likely have to go inverted. If I closed it today then I would be pocketing about $280, which is good for about 18%. That's not the most attractive return but if the market moves sideways a bit then the theta (time) decay would generate about $22 additional profit every day. Of course, this is just a theoretical figure and would be realised if everything remained the constant.

So what's my trade for today?

#MU (#MicronTechnology). The price dropped nearly 4% today, the P/E is at 7 and the earnings is after the Sep expiration so I decided to go for a very conservative put at $52.5. I could have chosen the $55 too but I wanted to lower my risk. The extra $0.30 credit for the $55 didn't seem attractive given that I would be $2.50 closer to the current price.

The stats

Trade Type: Short Put

Strike: $52.5

Expiry: 16 Sep

Delta: 13

IV Rank: 32.1

Premium: $0.65

Cap Req: $526

Annualised Prof at Expiry: 107%

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:

https://www.tycoonitos.com/community/market-comments/market-comments-20220804

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-20220419