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I feel those volatility spikes from macro indicator reports are a big part of why this works in the long run so I carried on. It’s the unexpected spikes that make for a rough go.
Totally agreed. On June 9th I sold puts with IV ranging from 24 to 26, higher than the VIX, and also the highest IV in the past few weeks. The last time I sold a call with higher IV than this was May 19th.
Sold 4185 strike near the market close for $0.95. Moderate inflation (2-5%) is likely good for stocks, since most have debt that is devalued and should ride up with inflation.
However, higher inflation leads to uncertainty and we probably have some big drop days.
@navypack Yeah, if you dig deeper into the CPI numbers that were released, the biggest contributors came from automobiles and travel. These two are seemingly transitory and should hopefully flatten off within a year once the shortages can alleviate.
However, inflation can be self fulfilling so if inflation holds up and consumers expect it, it can be hard to stop.
I have puts until next weds around 4150. Fortunately a batch expired today. The past few weeks I have been running slightly over 6x leverage which is way too high.
After today I'm back at 3x however after Monday I will be back around 2x which is a much more sensible exposure. Got a bit carried away since the beginning of May
Fed Meeting on Wednesday, so maybe some higher VIX today.
@navypack Fed meetings are always a boost in IV! Let's hope they don't rock the boat! 🙂
My suspicion is that they will try to calm fears about the Fed overreacting due to a temporary inflation spike.
Agreed on trying to calm fears about any over reaction, but not sold this is a temporary spike.