The rally continued today with the SPY increasing by 7.5% in 4 trading days.
When will the rally stop?
I would say: this week. But the market is random so nobody knows.
I was, once again, forced to make a lot or adjustments to my positions by managing my winners.
What does that mean?
A strangle means that we sold both put and call options against the same stock and we hope that the stock price remains between our strike prices. However, as the price moves, one side would suffer while the other side would gain. So managing our winners means to roll our winning side up/down depending on which side is winning. If the stock price moves higher then the put side wins so we move the put strike higher and collect additional premium.
What's my trade for today?
As the volatility contracted a fair bit over the past few weeks it is getting increasingly challenging to find great trades, however something is always tradeable. Today I opted in for #RCL (#RoyalCaribbean) strangle. Although the IVR is much lower than a few weeks ago, it is still high compared to most stocks so a wide strangle seemed like a good deal.
Trade Type: Short Strangle
Strike: $45 / 75
Expiry: 16 Dec
IV Rank: 50.7
Cap Req: $608
Annualised Prof at Expiry: 256%
Let me know what you think.
Closed at $0.71 for an annualised profit of 610%.