We had an insane move a week ago that I could not understand and now the market is back where it was before the huge rally. In fact, it's a bit lower. I am completely fine with this move and I believe we will see more sideways action over the coming weeks.
For those, who are new to my daily market comments, I place and document one trade a day with the objective of helping everyone learn how to trade options.
What's my trade for today?
#AMD (#AdvancedMicroDevices). The stock reached $79.23 a week ago and it's now trading closer to $70. That's about a 12% drop so I am more than comfortable selling a put option against it even though the volatility (IVR) is fairly low.
AMD Daily Chart
Trade Type: Short Put
Expiry: 20 Jan
IV Rank: 27.6
Cap Req: $600
Annualised Prof at Expiry: 226%
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.