The market is eagerly waiting for Power's speech on Friday. Millions of people managing many trillions of dollars will closely monitor and analyse every word that will come out of his mouth.
Do options traders have to care?
There are two views on this. One side says that you just have to keep your portfolio and major positions delta neutral (near zero) and don't pay attention to the noise out there, while the other side analyses the macro and micro environmental factors at great detail to make decisions.
I believe in the balanced approach, however sometimes it makes it challenging to make decisions. To me, paying attention only to the delta is like trading purely based on chart analysis
So what's my trade for today?
I could not resist the temptation to do another earnings trade. This time it's against #JWN (#Nordstrom). I don't know anything nor care about this company. It's purely a non-directional trade with a wide strangle nearly 2x the expected move.
Trade Type: Short Strangle
Strike: $18 /30
Expiry: 16 Sep
IV Rank: 58.8
Cap Req: $524
Annualised Prof at Expiry: 197%
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.