UAL Bearish inclined naked calls 26 Aug expiryWhats The Plan/Trade/Thought
Airlines are doing well with the travel surge, but they are throttling this growth as their operations are unable to handle the demand and the macro economics
Flight delays and cancellations have battered the US industry this year as consumers starved for travel during the pandemic have forked over higher fares and crammed onto aircraft. The disruptions, fueled in part by labor shortages and air traffic control issues, have boosted costs as carriers seek to recover from two years of losses. Now concerns are rising that inflation could quash demand.
www.bloomberg.com
Both DAL and UAL had lacking earnings which is expected
Risk Mitigation
There is an S&R point at 41.10 and 39.88 (9.51% from entry). These are my alert points where I need to get out because I would probably be wrong
Imagine Yourself Taking The Other Side
The flip side would be markets rising despite the interest rate increases. This is a possibility but I won’t take this stance as it is even more risky given the larger bearishness and uncertainty
Look For New Information
I’m rejecting that interest rate hikes could be already priced into the market and as such it will start rallying
Meta also just posted their first ever revenue drop in their Q2 earnings and given how Tech is driving the entire market sentiment this aligns nicely to my bearish stance
Microsoft also misses estimates and reported lowest earnings growth in two years
How Do I Feel Now
Feel abit edgy, because it is really late for optimal Aug trade entries, but we needed to wait because of the Earnings and Interest Rate announcements
Trade Specs
Sold 210 @ 0.30
Strike 43
21% to Strike
74K BP Used
Max Gain: 6300
