The market is eagerly waiting for this week's CPI data and the Fed announcement.
The increasing nervousness is reflected in the jump of the VIX (volatility index) but we are nowhere near the levels we have seen a couple of months ago.
Does that mean we can relax?
Absolutely not. Traders always have to be on the lookout as things can get out of control very fast.
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?
#EWZ (#BrazilETF) $27 put expiring at the end of this week. I have traded EWZ a lot so I am very comfortable with the $27 strike. Because it's a short-term option I can easily roll it to Jan if the price moves against me. The potential return is phenomenal.
EWZ Daily Chart
Trade Type: Short Put
Expiry: 16 Dec
IV Rank: 37.2
Cap Req: $375
Annualised Prof at Expiry: 1752%
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.