Whats The Plan/Trade/Thought
- I identified this trade by looking at Finviz Groups and shortlisted the mid volatility Industry players (1 Month bull, 2 - 1 Week bearish). This was because I wanted to be trading in industries with less volatile price movements. Previously for the past 4 months I have been trading in industries at the forefront of any movement. Travel, Banks, VXX
- JWN is part of the department store industry and has seen a huge dip (20%) on the 24 Nov due to lacklustre results. While I don’t expect any huge dips in the near future, I also don’t expect huge bullish jumps especially with the current climate
- The other department store counters I explored were M and KSS. I liked KSS’s price movement also as it already spiked on the 24 Jan due acquisition news. M did not provide a good price for options contracts
I Feel
- I felt good for this trade and tactic as I have adjusted by trade selection and strike prices towards a volatile market bearish ranging market.
- This means I will take extra far strikes, even through it means sacrificing some alpha
Imagine Yourself Taking The Other Side
- I would feel afraid given all the negative news on Ukraine and Inflation. I do not think I would take this trade on the opposite side at all.
Imagine Yourself As A Neutral Observer
- While there is confidence in selling calls, there is also the earnings release on the 1 Mar. But given the entire market I think this is a safe bet. There is enough room for the price to rise (33% from strike) and it expires on the 11 March just before the release of the Interest rate increase (Week 14 Mar).
Look For New Information
- I am clearly rejecting the risk of earnings and if I am wrong in this trade. This would probably be the reason.
How Do I Feel Now
- I feel confident since was planning it and since I entered. This is a good trade and if it goes south it would either be because of me ignoring Earnings or just how the world turns.
Trade Specs
- Sold 270 Calls @ 0.33 - Strike 27
- % to Strike is 33%
- ATR is 55%
- BP used is 55k
Trade fermée: cible de profit atteinte:
Yay!
With 10 days to go and because my play is based the overall situation of the market. Will keep observing the price action and if it shows strong bullish patterns I will bite the bullet and close it at a loss