Trade Findings and Adjustments 01-11-2024
Good Morning!!!
Throught processes = Holiday on Monday which means?= You get a day of time decay
Debit trade time is your ally
Credit trade time is your enemy
Beginning of a year, election year BUT what is the direction of the market currently?
CPI came in hotter so maybe the Jan 31ST FOMC rate hike meeting will show less rate cuts and possibly another rate hike
IWM – Russel 2000 first quarter historical pop !!! Thats our trade but lets go over why?
IWM Russell 2000 Covered call Mar 200 Short call
$191.50 BTO Russell 2000
STO March 200 Covered call for $3.36
Net Debit =- 191.50 – 3.36 cc credit 188.14
Place my order limit order of $188.25
Max Reward = 200 – 188.25 = 11.75 Profit or 6.24% ROI
$18,825 investment youy would make $1,175
PRIMARY EXIT to close with $500 profit
Adjustments
IF you place this trade you have $3.36 downside protection = 2% of the Total Invested capital (TIC)
IF IWM tanks add a protective put ATM
IF IWM tanks roll down the covered call to maybe 195 for a profit and to collect more credit in the short call.
