This week's sideways move has been great for those who trade both sides of the market with options.
However, in these sorts of environment it's especially important to pay attention to the volatility.
Why?
Because if one sells options when the volatility is low then a sudden increase in volatility can really hurt them.
Even the directionally good position can cause headaches.
So what's my trade for today?
#TGT (#Target). The earnings took place this morning and the stock fell over 16% only to recover to a 13% drop. I tried my luck with an iron condor expiring in 2 days. If it doesn't work out then I can roll it to Dec. Also worth noting that the long sides of my iron condor are only there to reduce the capital this trade requires.
The stats
Trade Type: Short Iron Condor
Strike: Short 150/165 Long 140/177.5
Expiry: 18 Nov
Delta: 0.47
IV Rank: 45.9
Premium: $1.04
Cap Req: $1142
Annualised Prof at Expiry: 1662%
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.
Closed:
https://www.tycoonitos.com/community/market-comments/market-comments-20221018
Rolled:
https://www.tycoonitos.com/community/market-comments/market-comments-20220802
Let me know what you think.
Perfect trade!
It expired worthless so I am pocketing my $1.04 for an annualised profit of 1,662%.