Dear Trader,
Markets were BUZZING this week.
All eyes were on inflation and stocks got whacked!
But then we rallied back the last two days in anticipation of more money printing!
As we head into the weekend, market participants are wondering if this was a buy the dip or sell the rip?
Despite the fast market action we were able to put two more winners on the board.
Before we talk about those, let’s talk about the CBOE Volatility Index (VIX), aka the “fear” index.
We saw a massive spike early this week, but reverted back and closed at 18.81, which is above our key 15 level.
So despite the market action this week, we are still in a bull volatility regime.
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.
Here’s a recap of what we did this week.
On Monday:
Buy-To-Open the Li Auto Inc. ADR (NASDAQ: LI) May 28, 2021, $15 put (LI210528P00015000)
Buy-To-Open the JD.com, Inc. ADR (NASDAQ: JD) May 21, 2021, $67.50 put (JD210521P00067500)
On Wednesday:
Sell-to-close the JD.com, Inc. ADR (NASDAQ: JD) May 21, 2021, $67.50 put (JD210521P00067500)
On Thursday:
Sell-to-close Li Auto Inc. ADR (NASDAQ: LI) May 28, 2021, $15 put (LI210528P00015000)
On Friday:
Buy-to-open the Under Armour, Inc. (UA) May 28, 2021, $19.50 Call (UA280514C00019500)
Buy-to-open Surface Oncology, Inc. (SURF) June 18, 2021, $10.00/$12.50 Call Spread
Right now, we’re holding:
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.
Sell-to-close the JD.com, Inc. ADR (NASDAQ: JD) May 21, 2021, $67.50 put (JD210521P00067500)
Date: May 10, 2021
Outcome: Closed for a 26% gain.
Notes: I have my criticism about my execution because I didn’t have my orders in place. If I did, I would have had a better execution price. The trading gods threw me a bone and I was able to take the 26% gain. This traded very oddly because the next day, shares dropped like a rock, which hit peak profit. That’s the markets for you.
Li Auto Inc. ADR (NASDAQ: LI) May 28, 2021, $15 put (LI210528P00015000)
Date: May 10, 2021
Outcome: Closed for a 10% gain.
Notes: If I had my orders on the books this would have been a 50% gain. The trading gods threw me a bone with this and allowed a small profit. It’s not ideal, but that’s how it goes often.
That’s all for today.
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