Hitting a Hot Streak Mid-Year!

July 15, 2020

This is the halfway point for 2020 and we continue our winning streak.

In the last two months, you've closed 8 out of 9 winning trades for incredible gains of 434%!

Big banks kicked things off earnings season yesterday — and reports were not as bad as some feared.

The market is rewarding financial firms that have big trading desks Vs. those with heavy mortgage exposure 

A Tuesday turnaround shook up most of the cautious pullback that we saw on Monday.

But the most focused trade right now is back to normal Vs. America 2.0.

Volatility is still elevated with the fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX) is holding at 28.

Right now, we’re holding:

  • Nordic Amer Tankers (NYSE: NAT) Oct. 16, 2020, $5 call (NAT201016C00005000)
  • Novo Nordisk A/S ADR (NYSE: NVO) July 17, 2020, $72.50 call (NVO200717C00072500)
  • China Mobile LTD ADR (NYSE: CHL) Aug. 21, 2020, $40 call (CHL200821C00040000)
  • GOODYEAR Tire & Rubber Co. (NASDAQ: GT) July 17, 2020, $5 put (GT200717P00005000)

Now we wait and let the market come to us.

And I’ll be keeping you updated every step of the way.

Your Questions, Answered!

The mailbag is full, so let’s get to your most pressing questions

“I sold the rest of my ON July $21 calls last week as you recommended. Since July expiration is this Friday, I want to make sure — am I completely done with these calls now? Do I have any obligations to buy shares of the stock? -George R.”

This is a great question!

This is a habit that I do at every expiration.

It can be confusing on whether you may have to buy shares of that company.

But we’re not in the business of holding shares of stock — only trading options!

Since we're buying options, we have the right to exercise the options contract.

If the options contract expires one penny in-the-money at expiration, the contract will automatically get exercised.

That is why I review my positions every expiration to make sure there aren't any options contracts that are on the dance floor. 

If that option contract is out-of-the-money, it expires worthless and is removed from our holdings that following Monday.

Once you sell ALL of your contracts, as we did with ON, you no longer tied to that position.

That means you don’t have to worry about the expiration date, buying shares of the underlying stock, or the option’s price after you sold it.

The position will leave your portfolio. And like that, we’re out of the trade!

The proceeds will show in your net liquidation value and use those winnings towards the next recommendation — or something else you’ve been saving up for.

If you need a refresher on options trading, be sure to review your options trading “cheat sheet” located here.

Let’s jump into the next question in the queue:

“On Monday I bought your recommended CHL Aug options $0.60. I notice the price has dropped since then. Is now a good opportunity to buy more options contracts at a lower price? -Darrell B.

As an options trader, oftentimes we'll enter into a new trade only to watch it decline double-digit shortly thereafter…

Don’t let this discourage you, it’s just how the instrument works.

As you’ve seen from our previous trades, options move fast...

Which is why we like to use them to book big weekly gains!

But remember, even if an option declines in value right after you buy it; these are only paper losses until you close your position.

That's why every options trader must maintain patience and persistence.

Now, that said.

If you’re feeling especially optimistic about a position that is trading lower than our entry price, feel free to take a position — or purchase more of an existing one — at the lower price.

By purchasing more of these options, you do increase your risk.

I do discuss this approach in the master class located here

, but it's for those investors who have large accounts and can stomach the risk.

The buy and sell recommendations I send for the options I have chosen are what we track.

Some follow them to the letter and others with a grain of salt.

Either way, know your risk tolerance, and don’t overdo it!

Anytime we make a move — I will shoot you an email alert.

You’ll never be flying blind, every position I provide is accounted for a win or lose.

With that said, I look forward to answering more next week.

If you want your questions answered next week, make sure you email it in today at [email protected]

Talk with you on Friday.


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%