A Day Early on Selling May and Going Away

April 30, 2021

Not only is today Friday — it’s also the last day of April. 

The weather is starting to heat up, but we also closed out two winning trades this week. 

We’ll talk more about those in a few minutes and our trades that expired, but first let’s talk about today’s weakness. 

Stocks continue to be choppy as earnings season starts to pick up over the next few weeks. 

The big boys of tech (AMZN, FB, GOOG, and AAPL) all released strong numbers, which pushed the Nasdaq 100 to new all-time highs on Thursday.

This slow market action will pick up soon. 

Especially after what we heard Wednesday night in how much more spending this administration is looking to do.

We are in no mans land right now and no one is sounding the alarms.

Now, The CBOE Volatility Index (VIX), aka the “fear” index, is still above our key 15 levels, trading at 18.68.

This is two points higher from last week, which is likely due to earnings season. 

What this tells us is that we are in a bull volatile market. 

That means the market bias is still higher, but it will likely be choppy and picking our spots will be even more critical. 

Now let’s talk shop.

Portfolio Update

Today, these positions expire.

  • Rocket Companies (NYSE: RKT) April 30, 2021, $24 call (RKT210430C00024000)

Unfortunately, we don’t have more time for these positions to play out.

There’s nothing that you need to do, and they will be removed from your account over the weekend.

Taking losses isn’t fun, but without the bitter, the sweet isn’t as sweet.

But remember…

The sweet part is making money and losses are part of the process.

Our limited risk options allow us to trade profit opportunities with greater flexibility — and much higher potential gains than buying stocks outright.

And we’ll have a brand-new batch of trades coming in a few weeks for another shot at quick profits. (So, keep your head up and focused!)

Here’s a  recap of what we did this week.

On Monday:

Buy-To-Open the EQT Corp (NYSE: EQT) May 21, 2021, $20 call (EQT210521C00020000)

On Wednesday:

Sell-To-Close the EQT Corp (NYSE: EQT) May 21, 2021, $20 call (EQT210521C00020000)

Sell-To-Close the Melco Resorts & Entertainment Limited (NASDAQ: MLCO) May 21, 2021, $19 call (MLCO210521C00019000)

Buy-To-Open the E2open Parent Holdings, Inc. (NYSE: ETWO) June 18, 2021, $12.50 call (ETWO210618C00012500).

Right now, we’re holding:

  • Schlumberger Limited (NYSE: SLB) June 18, 2021, $40 call (SLB210618C00040000)
  • NRG Energy, Inc. (NYSE: NRG) May 21, 2021, $40 call (NRG210521C00040000)
  • Petrobras (NYSE: PBR) June 18, 2021, $8 call (PBR210618C00008000)
  • E2open Parent Holdings, Inc. (NYSE: ETWO) June 18, 2021, $12.50 call (ETWO210618C00012500)

After-Action Journal

This is my journal which is a debrief of every trade closed or expired to analyze what happened, why it happened and how it can be done better — like what the military uses after missions.

EQT Corp (NYSE: EQT) May 21, 2021, $20 call (EQT210521C00020000)

Date: April 26, 2021

Outcome: exited calls for 66% gain.

Notes: We executed this perfectly. We sold after it triggered the profit target and cashed out. 

Melco Resorts & Entertainment Limited (NASDAQ: MLCO) May 21, 2021, $19 call (MLCO210521C00019000)

Date: April 2, 2021

Outcome: exited calls for 31% gain.

Notes: We executed our profit target as planned, but I did break a cardinal rule. That rule is to never hold a position through earnings, but this wasn’t done on purpose. There are different vendors for data and sometimes they are wrong on the date they record. I wasn’t aware earnings were on Tuesday evening. Luckily, this worked out in our favor.  

Rocket Companies (NYSE: RKT) April 30, 2021, $24 call (RKT210430C00024000)

Date: April 15, 2021

Outcome: expired worthless.

Notes: We took a shot and this didn’t work out as planned. I got caught hoping early this week that we would see a continued move instead of closing it to salvage the premium. In all of my years of experience I know we shouldn’t be caught holding any positions into the last week of expiration. 

The great thing is we continue to learn and focus on getting better. 

Now it’s time to head to the pool with a fresh jalapeno margarita - TGIF! 

I'll have a new trade on Monday and have a great weekend.

To your wealth, freedom, and options!

Joshua M. Belanger

Joshua M. Belanger
Joshua Belanger is founder of CounterVest and the editor of Hot Money Trader. He has been providing ordinary investors blockbuster returns since 2008. In 2018, the average return of Hot Money Trader beat the markets by over 15%