Market comments 20221102

The market didn't like what the Fed said today.

Many were expecting the Fed to say that they will stop raising interest rates moving forward but the Fed did not say that. They did, however, indicate that they will slow down and that they will have some conversation about it.

Anyways, the market is pricing in further rate hikes. Many of the large names (Amazon, Microsoft, Google, Meta) are at very attractive levels and I can't help it but to think that this is what Warren Buffet has been waiting for. I wonder how much of his $120bn cash he spent so far. Perhaps it's time to pay attention to his company's share price (BRK B).

Deep inside I was expecting the market to drop so I was fairly slow in rolling up my put sides on my index (SPY, IWM, QQQ) positions, which payed off big time today.

So what's my trade for today?

#ROKU earnings. There is no logic here apart from selecting a wide strangle and hope that the price will remain between the legs 24 hours later.

ROKU Daily Chart

The stats

Trade Type: Short Strangle

Strike: $40 / 80

Expiry: 18 Nov

Delta: 3

IV Rank: 67

Premium: $1.32

Cap Req: $562

Annualised Prof at Expiry: 536%

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.