DailyPlay – Closing Trade (MAR) – August 30, 2023

Closing Trade

• MAR – 68.81% Loss: Sell to Close 8 Contracts (or 100% of your Contracts) Sept 15th $197.50/$187.50 Put  Vertical Spreads @ $0.68 Credit. DailyPlay Portfolio: By Closing all 8 Contracts, we will receive $544. We initially opened this trade @ $2.58 Debit per contract. Our average loss, therefore, is $190 per contract. 

Investment Rationale

Market sentiment has made a 180 as the S&P 500 breaks above the key $4450 resistance level on the back of weaker JOLTs data. Bond traders have moved expectations of rate cuts forward from July to June of 2024, ahead of the Fed’s forecast and 10-year yields have responded by tumbling to 4.1%. However, I’m not confident that we’re out of the woods yet. I still believe that there are opportunities to add some downside exposure as we rally but at the moment, we have to review one of our open positions that have reached a stop loss level. MAR has rallied back above its key $200 resistance level and the options have lost more than 50% of the premium paid and it’s time to close this trade out at a loss. We have a good amount of long exposure and now only NFLX for short exposure. Depending on how markets respond this week, we will look to potentially allocate more capital to bearish exposure and start taking profits on our long positions.