Yesterday I wrote that after 5 consecutive downwards move I was expecting the market to go higher later this week so I am not surprised about today's tape action.
The drop in volatility and the overall rally enabled me to close 3 of my bullish positions (naked put) for decent profits and my positions on the index funds (QQQ, SPY, IWM) are also looking much better.
Is this rally indicating the end of the bear market?
I highly doubt it but we can certainly expect the market to go higher. The risk for options traders is when the market swings too much in a short period of time, therefore those with short call positions must be alert.
So what's my trade for today?
#MPC (#MarathonPetroleum). The price spiked up today big time to near its high in Aug. I sold a call option against it hoping that the sudden spike today will see a bit of correction in the coming days. The strike I selected ($110) is another 10% higher, or approximately 20% above the price a day ago, so I believe it's a fairly safe position with over 80% probability of profit.
The stats
Trade Type: Short Call
Strike: $110
Expiry: 21 Oct
Delta: -22
IV Rank: 69.6
Premium: $1.24
Cap Req: $1049
Annualised Prof at Expiry: 188%
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-20220923
https://www.tycoonitos.com/community/market-comments/market-comments-20220926
https://www.tycoonitos.com/community/market-comments/market-comments-20220927
Let me know your thoughts.
Nice winner!
Closed at $0.72 for an annualised profit of 113%.