Today is February monthly options expiration day and we have a few options that expire today.
Before we dive into the portfolio let me share a floor secret I learned to push through the red on the screen.
On the floor, when a trader had an ugly trading day, we’d say it’s a “black tape” day.
What they would do is put a piece of electrical tape over their PnL — profit and loss statement.
It’s a mind trick, but some of the best successful traders I saw used it.
Because even after a bad day, the best traders showed up the next day eager to see what opportunity may come to them.
Dealing with losses is the toughest aspect for everyday traders and investors to push through because of the fear of losing it all.
It’s no secret markets haven't been too kind to our trades.
Unfortunately, we’ve had about 3 forced errors on execution over the last few weeks with a position spiking higher, but then quickly fall back and then become a losing position.
It’s easy for me to say trust the system because I’ve done this for so long, but that’s how we can push through the losses to get to the wins.
Last year, we had 57 total trades.
34 winning trades and 23 losing trades for a winning percentage of 59% and overall gain was 108%.
That’s a real edge, that’s why I trust the Hot Money Trader system.
Now, The CBOE Volatility Index (VIX), aka the “fear” index, is still above our key 15 levels, trading at 21.
Volatility has been able to hold this level and it’s likely we’ll see a one day sell-off next week.
Now let’s talk shop.
Despite closing two winning trades last week, we have a few expiring today that fell short of our profit targets.
Today, these positions expire.
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!)
On Monday:
Stock market was closed
On Tuesday:
Buy-to-open the BP p.l.c. (NYSE: BP) June 18, 2021, $24 call (BP210618C00024000) up to $1.75 per contract or better, for the day.
On Wednesday:
Buy-to-open the World Wrestling Entertainment, Inc. (NYSE: WWE) March 19, 2021, $55 call (WWE210319C00055000) up to $0.55 per contract or better, for the day.
Right now, we’re holding:
This is our debriefing 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.
Flex Ltd. (NASDAQ: FLEX) Feb. 19, 2021, $20 call (FLEX210219C00020000)
Date: February 08, 2021
Reason: Our system triggered a buy alert after bullish call buying positioned a new $$21 million New Money bet that shares will quickly pop higher for a profit before today, which is a 10,600% surge in new opening call options.
Outcome: Expired worthless.
Notes: We took the signal, but right after our entry prices pulled back. That is normal, but doesn’t help when we have an option contract with such a short time with expiration. One thing I’ve noticed with my backtesting and optimizing our capital, is to start cutting losses at 40%. I will share more in the coming weeks after I finish the tests, but this is a position we should’ve cut lose quicker.
ProShares UltraPro Short Dow30 (NYSE: SDOW) Feb. 12, 2021, $12 call (SDOW210219C00012000)
Date: February 11, 2021
Reason: Our system triggered a buy alert after bullish call buying positioned a new $9 million New Money bet anticipating that shares could pop higher for a big profit by today … which is a 3,800% surge in new call options opened.
Outcome: Expired worthless.
Notes: This was a lotto ticket type of trade. These options would’ve popped if we saw a sharp sell-off like we did at the end of January. It is a loss, but if we want to get a chance at big wins, we need to take our shots when it makes sense.
América Móvil, S.A.B. de C.V. (NYSE: AMX) February 19, 2021, $16 call (AMX210219C00016000)
Date: February 11, 2021
Reason: Our system triggered a buy alert after bullish call buying positioned a new $6.6 million New Money bet, which is a 5,700% surge in new call options purchased.
Outcome: Expired worthless.
Notes: We took the signal, but this was a dog. As I mentioned about FLEX, this is a position we should’ve cut lose quicker.
The market is great at humbling us at times.
But if we keep focused and work through adversity, we’ll come out on top.
I’ll have a new trade for you on Monday, have a great weekend.
To your wealth, freedom, and options!
Joshua M. Belanger