It’s been a sit on hands type of week as stocks take a breather.
On the trading floor, we call this an inside week.
But things will heat up next week with ⅓ of the S&P 500 companies reporting, third-quarter GDP and continued stimulus talks.
I’m surprised that the market continues to trade off stimulus hopes because I don’t expect anything until after the election.
But here we are… hanging on Washington’s every word.
Frankly, I’m sick of politics being shoved down our throats.
I wish it would all go away so stocks could focus on free markets, but the government has intervened too much to allow that to happen.
As exhausting as it can be, let’s remember it’s about price, not politics.
Now, the fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX) is at 27.
That means volatility continues to be 200% higher than usual.
We’ll continue to look for trades to play both sides of the market as we have the last few weeks and profit!
Let’s talk shop.
- Buy-To-Open the Hostess Brands Inc. (NASDAQ: TWNK) Dec. 18, 2020, $15 call (TWNK201218C00015000) up to $0.35 per contract or better, for the day.
- Sell-To-Close the Vonage HLDGS Corp. (NASDAQ: VG) Dec. 18, 2020, $11 call (VG201218C00011000) at $1.10 per contract or better, for the day.
Right now, we’re holding:
- Hostess Brands Inc. (NASDAQ: TWNK) Dec. 18, 2020, $15 call (TWNK201218C00015000)
Now we wait and let the market come to us.
Patience and persistence are key, and I’ll be keeping you updated every step of the way.
Vonage HLDGS Corp. (NASDAQ: VG) Dec. 18, 2020, $11 call (VG201218C00011000)
Date: Sept. 22, 2020
Reason: Our system triggered a bullish signal after a $2.1 million Hot Money bet. This activity was a 500% surge in calls purchased and only profit is shares go higher.
Outcome: 5% gain.
Notes: We took our shot, but this didn’t play out as I anticipated. Closing out a win is essential, but the gain on this doesn’t move the needle. We still have time for this to play out more, but we’ve been in this position for over a month. There’s a cost to holding positions and that’s not what we’re looking to do. We want to get in and cash out quickly. So instead of fighting the tape and hoping, we punt the position and move onto a better opportunity.
I’m looking forward to answering your most pressing questions this Wednesday.
If you want yours included, send it to [email protected].
Have a great weekend, and I’ll have a new trade for you on Monday.
To your wealth, freedom, and options!
Joshua M. Belanger