USB Bullish inclined Naked Puts 28 Jan Expiry (Jan Track 3)

NYSE:USB   U.S. Bancorp
Whats The Plan/Trade/Thought
  • US Bancorp is an American bank holding company. With the Fed intending to increasing interest rates to combat the high inflation numbers. I expect banks to see an increase in their earnings from this especially near term where consumer sentiment is still bullish .
  • Already the Nasdaq bank index is up around 32% for the year

    I Feel
  • The market in my opinion is in a bearish range. With drops being deeper than the recoveries. USB and a number of the financial counters like MET, TFC , BK , BAC are in a similar price pattern. Mostly near the bottom of their range.
  • If the range continues it will also be aligned to my near term POV on the banking sector

    Imagine Yourself Taking The Other Side
  • On the flip side as I do feel we are market wide in a bearish sideways movement. Having USB drop and break the range is also a possibility. Will need to monitor this. Also the price action since 25 Oct 2021 has been bearish .

    Imagine Yourself As A Neutral Observer
  • This trade is really not about up or down but really about trading on the lack of expected volatility . Do we expect defining movements in Jan?

    Look For New Information
  • There is an Earnings release on the 19 Jan that I only realised after I entered the trade. This is very careless of me... I will need to be vigilant during that period. But generally earnings in the past three quarters have beaten estimates

    How Do I Feel Now
  • Somewhat lukewarm with my decision. I believe the uncertainty is due to the 19 Jan Earnings I did not notice. Also while the daily chart is showing a range and I am reacting to it and not predicting a bottom. I am still apprehensive as it can break the range.

    Trade Specs
  • Sold 160 Puts @ 0.25 - Strike 51
  • % to Strike 10.14%
  • ATR % is 94%
  • BP used 81K
  • Max Gain: est $3896


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