I would hate to be in the position of stock/ETF traders as there is so much uncertainty at the moment that it would be very difficult to predict which way the market is going to move.
First of all, another critical Fed announcement will take place tomorrow and we live in a world where one single word could send the market up or cause it to collapse.
Second, the Russian leaders are not going to accept defeat easily so the war in Ukraine can escalate to levels nobody hopes to see.
The good news for options traders is that we can play both sides of the market with various strategies and the more uncertainty there is the lower our risk is. That's because higher risk means higher option premiums so our break even points move further away from the current prices.
So what's my trade for today?
#SHOP (#Shopify). I traded this stock in July but I pretty much just broke even because I went for a big win. This time, I decided to try my luck with a wide strangle expiring before the next earnings. The IVR is quite elevated therefore the premium is very attractive.
SHOP Daily Chart
Trade Type: Short Strangle
Strike: $25 / 40
Expiry: 21 Oct
IV Rank: 63.3
Cap Req: $313
Annualised Prof at Expiry: 466%
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.