The market was very quiet today with most traders eagerly waiting for the inflation data to come out tomorrow. The interesting question is whether we can actually trust the numbers. The Fed may choose to just manipulate the numbers to keep the market calm and avoid a major crash.
So what's my trade for today?
#FXB (#BritishPoundETF). The pound is at ridiculously low levels compared to the dollar so I placed a bet on a bounce back till March 2023. I sold the $90 put and bought the $106/107 call vertical. The premium from the put was more than what the call vertical cost so as long as the price remains above $89.70, this trade will generate a bit of profit. If we see a bounce back above $107 (currently at $106.69) then this trade will generate a fairly healthy return with low risk.
The stats
Trade Type: Custom
Strike: $90 / 107 long 106c
Expiry: 17 Mar
Delta: 15
IV Rank: 73.5
Premium: $0.3
Cap Req: $2755
Annualised Prof at Expiry: ?
Let me know what you think.
Small winner!
Closed at $0.50 for an annualised profit of 15%.
If this trade didn't require so much capital then it would have been a nice one.