Closing Out a Rough Week

November 12, 2021

Dear Trader

The stock market is an interesting game of real-time emotions

One week you’re feeling on top of the world…

...Then the next week you feel like a fool!

That’s how I feel this week with our TSLA trade. 

But, that’s why it’s important to keep the variance of our emotional highs and lows to a minimum. 

This was a black tape over our PnL kind of week, TGIF!

It was a challenging week, but we’ll get through it and get back on track. 

Let’s talk about the CBOE Volatility Index (VIX), aka the “fear” index, which closed at 16, which is one point above our key 15 level.

That means risk is still back on going into next week and the path of least resistance is higher. 

Now let’s talk shop.

Portfolio Update

Today, this position will expire.

TSLA Nov. 12, 2021, $1200/$1225 call spread

Unfortunately, we don’t have more time for this 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.

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

On Monday:

F Nov. 19, 2021, $20.50/23 call spread

On Tuesday:

No action.

On Wednesday:

No action.

On Thursday:

No action.

On Friday:

No action.

Right now, we’re holding:

  • TROX December 17, 2021, $25/$30 call spread
  • CCJ Dec. 17, 2021, $30/$36 call spread
  • LVS Nov. 26, 2021, $41/$115 call spread
  • KO Dec. 3, 2021, $58 call
  • F Nov. 19, 2021, $20.50/23 call spread

Trade 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.

TSLA Nov. 12, 2021, $1200/$1225 call spread

Outcome: Expired worthless.

Notes: Originally, I structured this trade too tight on the overall market structure of TSLA. Since this was going parabolic the OTM calls were being bid up. Even though we were right on direction, the IV in those options went against us and didn’t allow for the profit I was looking for. Even though Elon Musk’s tweet didn’t help us, that’s not an excuse. I thought we would come into this week hanging around last Friday’s prices which would allow us to profit $10 per spread. The lesson from this is if you’re in a bad position, just close it. 

Now it’s time to get my 7 mile run in before enjoying a fresh spicy margarita - TGIF! 

Have a great weekend and talk with you on Monday.

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%