There was a lot of blood on the street this week.
When there is a Fed announcement then the market has the tendency of returning to its pre-announcement level within 24-48 hours but it did not happen this week. In fact, the SPY broke the $376 support line that I mentioned a few days ago and briefly went below the next support line of $365.
The last time we were at this level was the end of 2020. If someone bought stocks 2 years ago than they are most likely around break even or worse.
What will the coming week bring does not look really promising for the bulls. For me, personally, unfortunately I have some positions that are stuck but the beauty of options is that every month we can roll our positions and collect additional premiums.
So what's my trade for today?
#DAL (#DeltaAirlines). The price reached a major support level and the IVR is fairly high. I decided to take my chances with a naked put close to the current price and with a short expiration hoping that I will be able to exit my position before earnings.
Trade Type: Short Put
Expiry: 07 Oct
IV Rank: 54.6
Cap Req: $482
Annualised Prof at Expiry: 384%
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.
Let me know what you think.
Closed at $0.44 for an annualised profit of 409%.