Today was a Federal Reserve open market pronouncement day. Pretty much as expected, no change in rates and no likely raise of rates at any time in the future.
One would think that’s pretty bullish, and it was for an about an hour (see the CALLS chart below), but like a lot rally days recently there’s a sell-off into the close (see the PUTS chart below).
When the market doesn’t charge ahead on so-called good news, it is not good news and it could turn bad in a hurry.
FIRST OPTION PLAY: THE CALLS
$SPY #Options – #DayTrade
LONG 340CALL at 1.67, 9/16 expiration.STOP Flat.
RESULTS: Half off up 50%. Second half at breakeven.https://t.co/BsGsD7i7zu…#OptionsTrading #daytrading #1Kdaytrade #10Kdaytrade
— The God of Trading (@TheGodOfTrading) September 16, 2020
SECOND OPTIONS PLAY: THE PUTS
$SPY #Options – #DayTrade
LONG 343PUT at 1.90, 9/16 expiration.STOP Flat.
RESULTS: Half off up 100%. Second half up 50%.https://t.co/BsGsD7i7zu…#OptionsTrading #daytrading #1Kdaytrade #10Kdaytrade
— The God of Trading (@TheGodOfTrading) September 16, 2020
A SIDE NOTE ON THE PUTS PLAY:
Had that stayed with the initial breakeven and held to the close the second half would have been up around 130%. Them’s the breaks.
(click on the chart for a larger view)
