Finally a decent drop in the market today. I have been questioning the absurd rally we have seen over the past 7 weeks as it made no sense.
Will the market continue going down?
Nobody knows. I believe it will but I am just speculating like everyone else. As an options trader, I am already seeing more and more stocks that seem ripe for put options.
When the stock price of a very solid company falls to a certain level than normally it's fairly safe to sell put option against it.
So what's my trade for today?
#GDX (#GoldMinersETF). I have been eyeing this ETF recently and today felt like a great day to finally sell a put option against it. Unfortunately due to the time difference I was not able to take advantage of the price falling below $25 at market open but I still believe that the $24 strike price is pretty solid.
The stats
Trade Type: Short Put
Strike: $24
Expiry: 16 Sep
Delta: 30
IV Rank: 64.8
Premium: $0.53
Cap Req: $384
Annualised Prof at Expiry: 202%
Let me know your thoughts.
Exiting this position to de-risk my portfolio.
Closed at $0.51 for an annualised profit of 12%.
Although attractive looking annualised profit, the $2 actual profit is not going to take me far :)
Let‘s see it😉