CPI is Just One of Many Opportunities
There is always a trade, even if it's not the one you're thinking about.
This service is for general informational and educational purposes only and is not intended to constitute legal, tax, accounting or investment advice. These are my opinions and observations only. I am not a financial advisor.
The news cycle is endless, and in the financial world it is intentionally constant.
Earnings, the Fed, jobs and unemployment data, inflation data, it all comes through like clockwork.
The opportunities are endless.
This morning we get CPI data and while it might seem like a must trade situation, that is simply never the case.
There is always another trade to make. If a volatile event like CPI is not your thing, use the time to study the markets.
What I’m saying is, take the morning off if you aren’t feeling it. There will be another trade coming along, that is the only certainty in these markets.
For example, right after CPI data is digested, we get PPI data a day later on Thursday.
Another opportunity!
Taking this approach will help keep you out of bad trades. There is never a need to rush into a trade or take a sub optimal set up.
I personally like to wait for volatility to spike on CPI data, which juices the premiums for options and allows me to sell them for more cash.
My rule for selling options: Always covered, always juiced, never naked.
If I get the chance, I’ll sell a few contracts.
What is the difference between CPI and PPI data anyway?
CPI: The Consumer Price Index measures the average change in the prices paid by consumers for a basket of goods.
PPI: The Producer Price Index measures the average change in selling prices received by producers for their output.
If you have a handle on how these numbers may impact a stock or index, it may be worth preparing to trade around the information released.
If not, wait for the next opportunity. One is always right around the corner and odds are good I’ll write about one or two of them.
Have a great day trading!
-Nate