The market rally is false.
There is a great amount of well-known experts out there screaming that the US government and the Fed are manipulating the numbers, spreading false narratives and changing the way important metrics are being calculated. If you wish, you may do your research, but I want to call out a couple of points:
The definition of recession: 2 consecutive negative GDP. The GDP in the US was negative in the last two quarters but instead of allowing the info to filter through to the average individual, they changed the way the GDP is calculated so that they could claim that the US is not in recession.
The job numbers came out last week and it was much stronger than expected. Guess what? There is an ongoing national survey, which is far more reliable and it shows a negative job growth. Obviously that information doesn't benefit the government, especially given the fact that the mid-term elections are coming up. So once again, the bad news is suppressed and the false news is distributed.
I let you decide how you act on this info.
What's my trade for today?
As the VIX goes down, it becomes more and more challenging to find trades that I like, but #RCL (#RoyalCaribbean) came to my attention. I am more bearish on the cruise industry due to the high inflation but given how everything is all over the shop at the moment, I would not be surprised if the price went up. For this reason I selected a very wide strangle. The IVR is nowhere near the recent levels but still ok.
The stats
Trade Type: Short Strangle
Strike: $30 / 55
Expiry: 16 Sep
Delta: -3
IV Rank: 50.2
Premium: $0.69
Cap Req: $834
Annualised Prof at Expiry: 82%
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-20220809
https://www.tycoonitos.com/community/market-comments/market-comments-20220808
Rolled:
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
Let me know your thoughts.
It's a nice little winner!
Closed at $0.45 for an annualised profit of 131%.
I could have held it for longer as it was a fairly safe trade but I wanted to free up some capital.